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Abstract This paper utilises the staggered county‐level rollout of China's E‐commerce entering villages policy to examine the effect of policy‐driven platform economy development on local entrepreneurship. Exploiting county‐level variations in yearly new business registration with a difference‐in‐differences strategy, we find that policy‐driven platform economy development decreased the number of new business registrations and business entry rates by approximately 4.6% and 0.6%, respectively. The reduction effect is more prominent in business registration in micro‐small scale, tertiary industries, eastern regions, and rural areas. Microfinance plays a positive role in this association. Mechanism analysis shows that the platform‐driven supply chain transformation could rule out entrepreneurial opportunities, and the platform‐enabled gig work opportunities could weaken entrepreneurial motivation. Loss of entrepreneurial opportunities and motivation leads to less entrepreneurship.
Pan et al. (Sun,) studied this question.
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