Digital government and private firm creation: evidence from China’s “Internet plus government Services” reform

Zhijiu Yang, Yanfang Qin and Xiaoyi Lyu

Applied Economics, 2026, vol. 58, issue 33, 6719-6737

Abstract: Government digitalization has emerged as a key strategy for streamlining regulatory processes and improving public service delivery, yet its impact on the private sector remains unclear. Utilizing novel data from private firms, we examines the effect of China’s ‘Internet Plus Government Services’ reform, which integrates Internet technologies into public service provision, on private firm creation. We find that digital government significantly promotes entrepreneurship in the private sector by enhancing information accessibility and increasing administrative efficiency. The effect is more pronounced for smaller firms and in regions with higher institutional quality and greater Internet penetration. Moreover, digital government fosters high-quality private entrepreneurship, leading to increased job creation and enhanced innovation. These findings underscore the role of digital government as a catalyst for economic growth and innovation in the private sector.

Date: 2026
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DOI: 10.1080/00036846.2025.2525555

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