Supporting Digital Entrepreneurship in Low- and Moderate-Income Communities: Evidence from the CDBG Program

Digital technologies are reshaping the geography of entrepreneurship, expanding opportunities for business formation beyond traditional tech hubs. Yet, spatial gaps in digital entrepreneurship persist, particularly in low- and moderate-income communities. Using geolocated data on Community Development Block Grant (CDBG) investments and commercial domain registrations, this study examines how local use of flexible grant funds supports digital entrepreneurship in targeted ZIP codes. The analysis finds that CDBG investments in areas with robust broadband adoption are positively associated with digital entrepreneurial activity. The results further suggest that the type of investment matters, with varying associations for activities relating to infrastructure, public services, and business services. These findings contribute to research on place-based policies and inclusive economic development in the digital age.