Does e-commerce development drive regional entrepreneurial activity? Spatial spillover effect and mechanism analysis

Over the decades, global e-commerce has increased exponentially as digital technology progresses. Numerous studies have analyzed the economic influence of e-commerce development, while few scholars have examined the nexus between e-commerce development and entrepreneurship. This paper deploys a quasi-natural experiment formed by the e-commerce city (EC) policy in China and investigates the effect of e-commerce development on regional entrepreneurial activity using the Heterogeneity-Robust estimator in the difference-in-difference (DID) model. The empirical findings indicate that the EC policy can result in a substantial and robust increase in regional entrepreneurial activity. The mechanism analysis based on the supply and demand sides reveals that the stimulus effect can be achieved by advancing urban innovation, talent accumulation, and market demand. The stimulus influence becomes more significant with the increase of quantiles and appears more pronounced for service sectors, especially consumer services. Spatial econometric analysis suggests that local EC policy significantly promotes entrepreneurial activity in the surrounding areas. This study contributes to the growing body of knowledge on the relationship between e-commerce development and entrepreneurship and presents a feasible road to reinforce entrepreneurial dynamism through e-commerce progress.