The Digital Shock Absorber: Internet Access and New Business Creation after COVID 19

Cailing Li

doi:10.62051/ijgem.v10n6.15

Authors

Cailing Li College of International Education, South China Agricultural University, Guangzhou, Guangdong, China

DOI:

https://doi.org/10.62051/ijgem.v10n6.15

Keywords:

Digital entrepreneurship, New business creation, Internet access, Broadband, COVID 19, Panel data

Abstract

The pandemic that began in 2020 disrupted the ordinary work of starting a business, and many observers suggested that wider internet access would help economies keep forming new firms when face-to-face activity became difficult. This study tests that idea with a country-year panel from the World Bank Indicators API, covering 164 economies between 2010 and 2022, with the main models estimated on 1,251 country-years from 131 economies. New business density is the outcome, while internet use and fixed broadband measure digital access alongside development controls. The pooled estimate is positive but not significant, and the association turns positive and significant only under country fixed effects, before fading to nothing once year fixed effects absorb the shocks that all economies faced together. The internet by post-2020 interaction is positive in most specifications yet never significant, and it is sensitive to how the outcome is measured, while broadband shows no clear relationship. The evidence offers only limited and fragile support for the idea that digital access acted as a shock absorber for new business creation, and the design is observational with little independent within-country variation in internet use.

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