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Recent changes in information and communication technologies (ICT) have considerably changed the lives of millions of people and the economy around the world. On the one hand, a better broadband infrastructure improved the life quality of households and simplified their everyday routines. On the other hand, companies have benefited from increased employees’ productivity and the emergence of new business models that do not depend any more to a large extent on the location of the company. The latter circumstance was expected to be an additional motivating factor for small and medium-sized firms, as with the development of high-speed Internet, they could possibly successfully compete with market leaders; such goals, for example, were voiced in the Digital Agenda 2010 for Europe (European Commission, 2010).
Nevertheless, the academic literature lacks evidence linking the improvements of ICTs with entrepreneurship (firm entries) and mostly reveals the state of the art for the developed countries, predominantly for the United States. This dissertation attempts, on the one hand, to cover the existing research gap for Germany as previous studies are based on outdated data from the DSL era, or refer to the firm productivity or economic performance. On the other hand, we try to investigate the experience of less developed countries and hence include two specific cases: one is Palestine (where the recent introduction of 3G connectivity boosted the business activity) and the second is Lithuania (an underperforming EU member with a complex historical background).
The main conclusion from this dissertation is that broadband, as a rule, has a statistically positive relation to the number of firm entries, which stays in line with recent studies. Whether the effect of high-speed connections is amplified thanks to other externalities, such as the presence of a highly qualified workforce (skill complementarity) or entrepreneurial training, remains beyond the scope of this work due to statistical data imperfections and is expected to be researched by the author in the future.
