Page 62 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.83, # 1, 2026, pp. 58-81

2.2 Internet Penetration and Digital Entrepreneurship (TEN)
Internet connection creates opportunities for real-time communication, effective
information distribution, and market expansion. The literature demonstrates that a
positive relationship exists between internet penetration and entrepreneurial activity
due to reduced information asymmetries and increased innovation (Yeganegi et al.,
2021; Orlandi et al., 2020).

Moreover, Internet-based channels enable customer outreach and the testing of business
models at a reasonable cost, which is essential for digital start-ups (Chen & Ifenthaler,
2023). The said infrastructure forms the backbone of high-growth digital projects that
fall under the TEN, especially those that rely on the lean start-up approach.

The penetration of the internet enables online business models, online communication,
and access to international markets. With the rise in internet penetration, there tends to
be a subsequent rise in entrepreneurial awareness and opportunity recognition. It plays
a massive role in digital entrepreneurship behaviours, lowering transaction costs and
enabling market entry (Xiong et al., 2022; Cumming & Johan, 2023).

Besides, studies by Ejsing et al. (2021) conclude that digital infrastructure helps scale
firms more quickly by providing them access to platforms and cloud-based services,
and Watanabe et al. (2020) highlight the democratic nature of innovation through
internet access. A particular case is OECD economies, where internet access is
directly related to new venture creation, both in high-tech sectors and in creative
industries and services (Hasanli & Rahimli, 2023), (Musayev, 2019).

Hypothesis 2: Internet penetration positively influences digital entrepreneurship in
OECD countries.

2.3 GDP and Digital Entrepreneurship
GDP indicates the overall economic well-being and the economy's ability to finance
start-ups. The great GDP can help improve the business environment through
guaranteeing demand, capital, and infrastructure. With a greater GDP, it is possible to
have more capacity in innovation and wave of entrepreneurship within the digital
economy (Audi et al., 2022). Empirical research indicates that GDP and
entrepreneurship have a positive relationship that is strongest (Azwardi et al., 2023).
In addition, national wealth creates fiscal space for government innovation programs
and subsidies that allow digital entrepreneurs to circumvent obstacles at the initial
stage (Teece, 1986; Zysman & Kenney, 2018). A thriving GDP is an indicator of
market optimism and a chance of a technical-oriented entrepreneurship venture, which
motivates TEN development. Adding evidence to this, Acs et al. (2008) argue that an

62