Internet and Family Entrepreneurship: Is Geographic Distance Still a Problem?

Abstract

This paper explores the value creation mechanism of the Internet from the perspective of family entrepreneurship, using data from the China Household Finance Survey (CHFS). The results show that the use of the Internet alleviates the negative impact of geographic distance on family entrepreneurship, and the effect is more pronounced in rural areas. The Internet reduces the gap between urban and rural areas in family entrepreneurship. Furthermore, the types of information obtained from the Internet by families influence the effects of the Internet. This paper provides evidence that Internet technology can promote entrepreneurial activities at the family level and extends the research on Internet and family entrepreneurship by examining the extent to which the Internet alleviates the negative impact of geographic distance. This supports the notion that the Internet provides a mechanism for economic development of remote and/or underprivileged areas, and therefore represents an important mechanism for promoting rural development.