E-commerce expands the bandwidth of entrepreneurship

Abstract Social networks are vital for trade in developing countries, but building them is costly, creating hurdles for new entrepreneurs. E-commerce can lessen this dependence by enabling direct transactions and timely payments between producers and consumers. This article examines whether better e-commerce access boosts entrepreneurship. Using Chinese business registry data and a novel measure of county-level 3G/4G infrastructure exposure, we find that improved access significantly increases new firm entry. It also shifts the composition of entrepreneurs toward those with higher education and outside working experience, who tend to depend less on social capital in their hometowns (JEL L14, L26, L81, O14).