Page 67 - Azerbaijan State University of Economics

Swaty Sharma, Munish Gupta: Does the Rise of Emerging Technologies Transform Digital
Entrepreneurial Activity? Evidence from OECD Nations

A panel data research design for OECD economies between 2004 and 2025 examines the
digital economy and entrepreneurship within its broader context of digital transformation.
Such a longitudinal specification is corroborated by recent econometric work in the
innovation research (Zheng et al., 2023; Hassan et al., 2024) and provides greater
opportunities to control for unobserved heterogeneity and dynamic trends at the country
level. Other panel-based approaches have been used effectively in other studies, such as
Ancillo et al. (2022) and Cumming & Johan (2023).

4.1 Dependent Variable:
Total Early-stage Entrepreneurship (TEN): This is measured by the Global
Entrepreneurship Monitor (GEM) and represents the rate of early-stage entrepreneurial
activity. In line with Giones & Brem (2017) and Paul et al. (2022), who describe digital
entrepreneurship as the one affected or facilitated by digital technologies.

4.2 Independent Variables:
1. ICT Goods Exports (ICT): Shares of ICT goods in overall exports. This gauges the
digital technology production and the preparedness of the infrastructure (Khan & Ximei,
2022).
2. Internet Penetration: Market reach and online access reflection. Mentioned in Xiong
et al. (2021) as one of the main facilitators of entrepreneurial activity on the Internet.
3. R&D Expenditure (% of GDP) (R&D): how much a country spends on innovation,
which fits into the innovation-based entrepreneurship paradigm (Ancillo et al., 2022).
4. Researchers in R&D per million (RR&D): the capability of countries' research and
research intensity measurement.

4.3 Control Variables:
1. Established Businesses (EST_BUS): Entrepreneurial ecosystem development level
reflection (GEM, 2024). Aids in the control of entrepreneurial saturation and
crowding effects.
2. GDP per capita (GDP): An indicator of economic development, which denotes
market size in terms of its ability to sustain an entrepreneurship activity.
3. Financial Risk Index (FR): This is obtained from the International Country Risk
Guide (ICRG) and measures macroeconomic volatility and stability of the investment
climate.

Based on Zheng et al. (2023) and Hassan et al. (2024), the study developed its
econometric models.

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