The impact of urban digital platforms on entrepreneurial activity: Evidence from China

Abstract

The development of urban digital platforms has changed its entrepreneurial environment and affected regional innovation vitality. We calculated the development index of digital platforms of 294 prefecture-level cities in China between 2013 and 2020 using the principal component analysis method. We used the microdata of enterprise registration information to describe the urban entrepreneurial activity. Digital platforms have promoted urban entrepreneurial activity significantly. Moreover, alleviating labour market distortions, optimizing the urban financial environment, and improving technological innovation are virtual channels for digital platforms to increase urban entrepreneurial activity. Furthermore, digital platforms play a more significant role in promoting urban entrepreneurial activity in the eastern region and cities with better industrial structures. This impact has a nonlinear increasing “marginal effect” in which the faster the development of digital platforms, the more significant the promoting effect on urban entrepreneurial activity.

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