Is e-Government a Driver to Enhance Entrepreneurship? An Empirical Investigation of European Countries

Abstract

Abstract This paper investigates the influences of digital public services on the ease of setting up a new business in 28 European countries during the period of 2012–2019. The development of digital public services is reflected in business mobility and key enablers. The digitalization-entrepreneurship nexus is analyzed by using the panel corrected standard error (PCSE) model, while we employ the dynamic fixed effects estimator (DFE) used in the autoregressive distributed lag (ARDL) model to measure the short-run and long-run effects. Our results indicate that the online delivery of government services positively affects the density of entrepreneurship in a country. We find robust results utilizing various econometric techniques and adding further explanatory variables. However, the positive effects of offering public services online are only found in the long run. Using digital public services benefits the entrepreneurial sectors by reducing the time and costs required to start a new business. Notably, digital transformation in the public sector acts as a shield to protect enterprises by dampening the detrimental effects of uncertainty on entrepreneurship.