The Impact of Technology Use on Entrepreneurial Activity and Owner Composition

Abstract

In this study, we examine the impact of each U.S. state’s score in technology use on the entrepreneurial activity in that state. We specifically focus on each state’s score on internet startup process, internet tax payment process, and internet licensing process to see how they impact the entrepreneurial activity in each state. We also examine whether the characteristics of small businesses and entrepreneurs differ across high technology use and low technology use states. Our results show that there is no statistically significant difference in terms of total entrepreneurial activity between states with technology scores and low technology scores. However, our results confirm that small businesses and entrepreneurs with certain characteristics prefer high technology use states. We find that new startups, entrepreneurs that are independent in the political scale and community college graduates tend to prefer states with high internet startup scores and high internet tax scores. Female entrepreneurs also tend to prefer states with high internet startup scores. Finally, we find that single employee firms, entrepreneurs with previous entrepreneurial experience, entrepreneurs that are liberal in the political scale and technical college graduates tend to prefer states with high internet licensing scores.