E-Government and Entrepreneurship: Online Government Services and the Ease of Starting Business

Governments around the world are making active efforts to encourage entrepreneurship. At the same time, governments have also embraced digital technology, particularly the online delivery of government services. This paper examines the effect of offering government services online on the ease of setting up new businesses around the world. Panel data from almost 200 countries between 2002 and 2010 were assembled from multiple public databases and analyzed with fixed-effects regression models in STATA to measure how bringing more government services online affected the number of procedures required to start a new business, as well as the time and cost of these procedures. In this first multi-country time-series study of the effect of e-Government on entrepreneurship, free from the biases of cross-sectional studies, we find that providing more government services online did indeed make it easier to start up business, as did improvements in the ICT infrastructure and education level of the country. We find that the online delivery of government services benefited entrepreneurs by reducing the number of procedures needed to start a business, and by reducing the time and cost of these procedures. Our study provides strong evidence for the positive effect of e-Government on entrepreneurship.