Impact of e- Government and Remittances on Business Creation: Evidence from Global Panel Data

Abstract

Remittances smooth out the income and expenditures of recipient households, enhancing their quality of life, but less is known about their impact on cross-border commercial activity. Likewise, governments worldwide are actively promoting entrepreneurship. Governments have also used digital technology, particularly the online delivery of government services. This study examines the effect of remittances and online government services, i.e., e-government, on forming new businesses worldwide from 2006 to 2020. In addition, the study considers the impact of the gross domestic product, unemployment, and government spending on firm formation. Due to the presence of cross-sectional dependence (CSD) and slope heterogeneity in the data, the second generation panel estimates Cross Sectional Autoregressive Distributed Lag Model (CS-ARDL) is used to determine short and long-run coefficients. According to the major findings, remittances and e-government have favorable and significant short- and long-term effects on forming new businesses. Additionally, GDP and government spending were found to contribute to creating new business prospects. However, unemployment has no substantial short-term or long-term influence on a company. Moreover, pertinent policies are offered based on the findings.