The Importance of Transportation, Broadband, and Intellectual Infrastructure for Entrepreneurship

This empirical study uses a unique panel dataset to investigate the link between regional entrepreneurship and infrastructure. This topic is vital for understanding the factors that facilitate entrepreneurship, yet it receives scant scholarly attention. It is of particular value to policy makers because entrepreneurship is crucial for economic growth. We therefore examine how broadband infrastructure (internet connectivity), intellectual infrastructure (human capital), and transportation infrastructure (roads, bridges, and intermodal facilities) affect the establishment of new businesses in the United States. We primarily focus on broadband infrastructure, which is the least explored of these factors in the literature. We find that all kinds of infrastructure help entrepreneurship, but especially intellectual and broadband infrastructure. The importance of infrastructure—particularly broadband—for entrepreneurship varies among industries, but is more important in innovative industries. When transportation and broadband infrastructure are both increasing, they provide an additional benefit to entrepreneurship. The impact of broadband on the startup rate is greater in rural areas and when unemployment is higher. These results may help policymakers understand which regional factors facilitate entrepreneurship