IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v81y2023ics0301420723000417.html
   My bibliography  Save this article

The impact of smart cities on entrepreneurial activity: Evidence from a quasi-natural experiment in China

Author

Listed:
  • Li, Chengming
  • Zhang, Xinyi
  • Dong, Xiaoqi
  • Yan, Qiangming
  • Zeng, Liangen
  • Wang, Zeyu

Abstract

Over the past decade, Smart Cities initiatives have attracted a great deal of global attention from governments and scholars. However, less attention has been given to the impact of Smart Cities construction on local entrepreneurial activity. This paper assesses the impact of Smart Cities construction on urban entrepreneurial activity using the difference-in-difference (DID) model based on panel data from 265 prefecture-level cities in China from 2002 to 2019. The empirical results show that Smart Cities policies significantly enhance urban entrepreneurial activity. After the parallel trend and placebo test, the estimation results based on the PSM-DID (Propensity Score Matching-Difference in Difference) method are robust and consistent with the baseline regression results. The mechanism analyses indicate that the possible channels for Smart Cities policies to exert a positive impact on urban entrepreneurial activity are improving the city's ability to attract investment and enhancing technological innovation. Furthermore, Smart Cities policies have a more significant incentive effect on entrepreneurial activity in eastern regions, larger-scale cities, and cities with higher levels of service informatization and a larger scale of government financial expenditure. This paper contributes to the policy effects of Smart Cities pilots and the factors influencing entrepreneurial activity. This paper has important implications for enhancing entrepreneurial market dynamics and promoting urban transformation programs in developing countries to empower a sustained wave of urban entrepreneurship.

Suggested Citation

  • Li, Chengming & Zhang, Xinyi & Dong, Xiaoqi & Yan, Qiangming & Zeng, Liangen & Wang, Zeyu, 2023. "The impact of smart cities on entrepreneurial activity: Evidence from a quasi-natural experiment in China," Resources Policy, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:jrpoli:v:81:y:2023:i:c:s0301420723000417
    DOI: 10.1016/j.resourpol.2023.103333
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723000417
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.103333?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul Reynolds & Niels Bosma & Erkko Autio & Steve Hunt & Natalie De Bono & Isabel Servais & Paloma Lopez-Garcia & Nancy Chin, 2005. "Global Entrepreneurship Monitor: Data Collection Design and Implementation 1998–2003," Small Business Economics, Springer, vol. 24(3), pages 205-231, February.
    2. Smith, Claudia & Smith, J. Brock & Shaw, Eleanor, 2017. "Embracing digital networks: Entrepreneurs' social capital online," Journal of Business Venturing, Elsevier, vol. 32(1), pages 18-34.
    3. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    4. Johan Hombert & Antoinette Schoar & David Sraer & David Thesmar, 2020. "Can Unemployment Insurance Spur Entrepreneurial Activity? Evidence from France," Journal of Finance, American Finance Association, vol. 75(3), pages 1247-1285, June.
    5. Sampsa Samila & Olav Sorenson, 2011. "Venture Capital, Entrepreneurship, and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 338-349, February.
    6. Aslan, Hadiye & Kumar, Praveen, 2021. "Globalization and entrepreneurial entry and exit: Evidence from U.S. households," Journal of Monetary Economics, Elsevier, vol. 120(C), pages 83-100.
    7. Shaker A. Zahra & Satish Nambisan, 2011. "Entrepreneurship in global innovation ecosystems," AMS Review, Springer;Academy of Marketing Science, vol. 1(1), pages 4-17, March.
    8. Satish Nambisan, 2017. "Digital Entrepreneurship: Toward a Digital Technology Perspective of Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 41(6), pages 1029-1055, November.
    9. Dominic Chalmers & Niall G. MacKenzie & Sara Carter, 2021. "Artificial Intelligence and Entrepreneurship: Implications for Venture Creation in the Fourth Industrial Revolution," Entrepreneurship Theory and Practice, , vol. 45(5), pages 1028-1053, September.
    10. Per Davidsson & Johan Wiklund, 2001. "Levels of Analysis in Entrepreneurship Research: Current Research Practice and Suggestions for the Future," Entrepreneurship Theory and Practice, , vol. 25(4), pages 81-100, July.
    11. Castaño, María Soledad & Méndez, María Teresa & Galindo, Miguel Ángel, 2016. "The effect of public policies on entrepreneurial activity and economic growth," Journal of Business Research, Elsevier, vol. 69(11), pages 5280-5285.
    12. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January.
    13. Robert N. Eberhart & Charles E. Eesley & Kathleen M. Eisenhardt, 2017. "Failure Is an Option: Institutional Change, Entrepreneurial Risk, and New Firm Growth," Organization Science, INFORMS, vol. 28(1), pages 93-112, February.
    14. Maurer, Joshua D. & Creek, Steven A. & Bendickson, Joshua S. & McDowell, William C. & Mahto, Raj V., 2022. "The three pillars’ impact on entrepreneurial activity and funding: A country-level examination," Journal of Business Research, Elsevier, vol. 142(C), pages 808-818.
    15. Marc Gruber & Ian C. MacMillan & James D. Thompson, 2013. "Escaping the Prior Knowledge Corridor: What Shapes the Number and Variety of Market Opportunities Identified Before Market Entry of Technology Start-ups?," Organization Science, INFORMS, vol. 24(1), pages 280-300, February.
    16. Mark S. Carey & Stephen D. Prowse & John Rea & Gregory F. Udell, 1994. "The economics of the private placement market(summary of staff study 166)," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 5-6.
    17. Frederik von Briel & Per Davidsson & Jan Recker, 2018. "Digital Technologies as External Enablers of New Venture Creation in the IT Hardware Sector," Entrepreneurship Theory and Practice, , vol. 42(1), pages 47-69, January.
    18. Gerard George & Ryan K. Merrill & Simon J. D. Schillebeeckx, 2021. "Digital Sustainability and Entrepreneurship: How Digital Innovations Are Helping Tackle Climate Change and Sustainable Development," Entrepreneurship Theory and Practice, , vol. 45(5), pages 999-1027, September.
    19. Caragliu, Andrea & Del Bo, Chiara F., 2019. "Smart innovative cities: The impact of Smart City policies on urban innovation," Technological Forecasting and Social Change, Elsevier, vol. 142(C), pages 373-383.
    20. Khan, Muhammad Zubair & Khan, Zafir Ullah & Hameed, Affan & Zada, Shehnaz Sahib, 2021. "On the upside or flipside: Where is venture capital positioned in the era of digital disruptions?," Technology in Society, Elsevier, vol. 65(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tiantian Gu & Shuyu Liu & Xuefan Liu & Yujia Shan & Enyang Hao & Miaomiao Niu, 2023. "Evaluation of the Smart City and Analysis of Its Spatial–Temporal Characteristics in China: A Case Study of 26 Cities in the Yangtze River Delta Urban Agglomeration," Land, MDPI, vol. 12(10), pages 1-23, September.
    2. Xing Ji & Jia Chen & Hongxiao Zhang, 2024. "Smart city construction empowers tourism: mechanism analysis and spatial spillover effects," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    3. Linlin Wang & Zixin Zhou & Yi Chen & Liangen Zeng & Linlin Dai, 2024. "How Does Digital Inclusive Finance Policy Affect the Carbon Emission Intensity of Industrial Land in the Yangtze River Economic Belt of China? Evidence from Intermediary and Threshold Effects," Land, MDPI, vol. 13(8), pages 1-17, July.
    4. Qigang Yuan & Yongsheng Ji & Wei Zhang & Ting Lei, 2024. "Cross-Border E-Commerce and Urban Entrepreneurial Vitality—A Quasi-Natural Experiment Evidence from China," Sustainability, MDPI, vol. 16(5), pages 1-23, February.
    5. Chen, Fanglin & Zhang, Jie & Chen, Zhongfei, 2024. "Assessment of the effects of extreme temperature on economic activity," Ecological Economics, Elsevier, vol. 222(C).
    6. Xin Tan & Jinfang Jiao & Ming Jiang & Ming Chen & Wenpeng Wang & Yijun Sun, 2024. "Digital Policy, Green Innovation, and Digital-Intelligent Transformation of Companies," Sustainability, MDPI, vol. 16(16), pages 1-23, August.
    7. Yue, Aobo & Mao, Chao & Wang, Zhuoqi & Peng, Wuxue & Zhao, Shuming, 2024. "Finding the pioneers of China's smart cities: From the perspective of construction efficiency and construction performance," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    8. Xiaoli Jiang & Xue Han & Li Xue & Zhuo Yu & Shuo Wei & Hejun Xu, 2023. "How smart city building improved corporate performance: empirical evidence of China’s a-share listed companies," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-8, December.
    9. Hongbo Fu & Rajah Rasiah, 2024. "Fostering Inclusive Green Growth in Chinese Cities: Investigating the Role of Artificial Intelligence," Sustainability, MDPI, vol. 16(22), pages 1-24, November.
    10. Gao, Yajuan & Zhang, Congqing & Wang, Yilin & Wang, Shuaihao & Zou, Yunjin & Gao, Junhong & Wang, Zeyu, 2023. "Fiscal decentralization and rural resource utilization efficiency: Evidence from quasi-natural experiment in China," Resources Policy, Elsevier, vol. 87(PB).
    11. Jiang, Zhengyu & Zhang, Xinyi & Zhao, Yingzhi & Li, Chengming & Wang, Zeyu, 2023. "The impact of urban digital transformation on resource sustainability: Evidence from a quasi-natural experiment in China," Resources Policy, Elsevier, vol. 85(PA).
    12. Rong Ran & Lei Hua & Tingrou Li & Yejing Chen & Junfu Xiao, 2023. "Why Have China’s Poverty Eradication Policy Resulted in the Decline of Arable Land in Poverty-Stricken Areas?," Land, MDPI, vol. 12(10), pages 1-18, September.
    13. Yang, Shubo & Jahanger, Atif & Usman, Muhammad, 2024. "Examining the influence of green innovations in industrial enterprises on China's smart city development," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    14. Mengyu Zhang & Xiaoyu Ma & Jiamin Liu, 2024. "Can Infrastructure Upgrading Achieve the Synergistic Effect of Pollution Reduction and Carbon Reduction? Evidence from the High-Speed Rail and “Broadband China” Strategies," Sustainability, MDPI, vol. 16(4), pages 1-22, February.
    15. Xiao Ling & Zhangwei Luo & Yanchao Feng & Xun Liu & Yue Gao, 2023. "How does digital transformation relieve the employment pressure in China? Empirical evidence from the national smart city pilot policy," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-17, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fossen, Frank M. & Sorgner, Alina, 2021. "Digitalization of work and entry into entrepreneurship," Journal of Business Research, Elsevier, vol. 125(C), pages 548-563.
    2. Francisco Olmo-García & Fernando Javier Crecente-Romero & María Teresa Val-Núñez & María Sarabia-Alegría, 2023. "Entrepreneurial activity in an environment of digital transformation: an analysis of relevant factors in the euro area," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    3. Becker, Kai & Ebbers, Joris J. & Engel, Yuval, 2024. "Going online: Peer entrepreneur networks in a startup accelerator before and during the COVID-19 pandemic," Technovation, Elsevier, vol. 130(C).
    4. Jiyoung Kimjeon & Per Davidsson, 2022. "External Enablers of Entrepreneurship: A Review and Agenda for Accumulation of Strategically Actionable Knowledge," Entrepreneurship Theory and Practice, , vol. 46(3), pages 643-687, May.
    5. Jiewang Chu & Jiaxuan Li, 2022. "The Composition and Operation Mechanism of Digital Entrepreneurial Ecosystem: A Study of Hangzhou Yunqi Town as an Example," Sustainability, MDPI, vol. 14(24), pages 1-19, December.
    6. Franziska Schlichte & Sebastian Junge & Jan Mammen, 2019. "Being at the right place at the right time: does the timing within technology waves determine new venture success?," Journal of Business Economics, Springer, vol. 89(8), pages 995-1021, December.
    7. Per Davidsson, 2023. "Ditching Discovery-Creation for Unified Venture Creation Research," Entrepreneurship Theory and Practice, , vol. 47(2), pages 594-612, March.
    8. Santos, Susana C. & Liguori, Eric W. & Garvey, Erin, 2023. "How digitalization reinvented entrepreneurial resilience during COVID-19," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    9. Smith, Claudia G. & Smith, J. Brock, 2021. "Founders' uses of digital networks for resource acquisition: Extending network theory online," Journal of Business Research, Elsevier, vol. 125(C), pages 466-482.
    10. Ari Hyytinen & Petri Rouvinen & Mika Pajarinen & Joosua Virtanen, 2023. "Ex Ante Predictability of Rapid Growth: A Design Science Approach," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2465-2493, November.
    11. Dominic Chalmers & Niall G. MacKenzie & Sara Carter, 2021. "Artificial Intelligence and Entrepreneurship: Implications for Venture Creation in the Fourth Industrial Revolution," Entrepreneurship Theory and Practice, , vol. 45(5), pages 1028-1053, September.
    12. Jianhong Zhang & Désirée Gorp & Henk Kievit, 2023. "Digital technology and national entrepreneurship: An ecosystem perspective," The Journal of Technology Transfer, Springer, vol. 48(3), pages 1077-1105, June.
    13. Emilia Herman, 2022. "The Interplay between Digital Entrepreneurship and Sustainable Development in the Context of the EU Digital Economy: A Multivariate Analysis," Mathematics, MDPI, vol. 10(10), pages 1-28, May.
    14. Hu, Jinjin & Huo, Dong & Wu, Delin, 2024. "Digital economy development and venture capital networks: Empirical evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    15. Tobias Kollmann & Lucas Kleine-Stegemann & Katharina Cruppe & Christina Then-Bergh, 2022. "Eras of Digital Entrepreneurship," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 64(1), pages 15-31, February.
    16. Oana Bărbulescu & Alina Simona Tecău & Daniel Munteanu & Cristinel Petrişor Constantin, 2021. "Innovation of Startups, the Key to Unlocking Post-Crisis Sustainable Growth in Romanian Entrepreneurial Ecosystem," Sustainability, MDPI, vol. 13(2), pages 1-16, January.
    17. Yu, Feifei & Du, Hongyan & Li, Xiaotong & Cao, Jiayu, 2023. "Enterprise digitalization, business strategy and subsidy allocation: Evidence of the signaling effect," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    18. Bachmann, Nina & Rose, Robert & Maul, Valeska & Hölzle, Katharina, 2024. "What makes for future entrepreneurs? The role of digital competencies for entrepreneurial intention," Journal of Business Research, Elsevier, vol. 174(C).
    19. Silva, Pedro Mendonça & Moutinho, Victor Ferreira & Moreira, António Carrizo, 2022. "Do social and economic factors affect the technical efficiency in entrepreneurship activities? Evidence from European countries using a two-stage DEA model," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    20. Schade, Philipp & Schuhmacher, Monika C., 2022. "Digital infrastructure and entrepreneurial action-formation: A multilevel study," Journal of Business Venturing, Elsevier, vol. 37(5).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:81:y:2023:i:c:s0301420723000417. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.