Journal of work and entrepreneurship reserch
Volume 2, Numéro 1, Pages 96-109
2026-06-30
Government Ai Readiness And Formal Entrepreneurship: A Cross-country Analysis Of New Business Density
Authors : Zhang Juan . Yihuan Lin .
Abstract
Government artificial intelligence (AI) readiness is increasingly used to benchmark national digital capacity, but its relationship with formal entrepreneurship remains unclear. This study examines the cross-country association between public-sector AI readiness and new business density across 156 countries. Using the Oxford Insights Government AI Readiness Index 2025 and World Bank indicators mainly from 2022, the analysis treats AI readiness as a contemporary proxy for persistent digital-governance capacity rather than as a temporal or causal predictor. OLS estimates with HC3 robust standard errors show that government AI readiness is positively associated with log new business density after controlling for GDP per capita, internet use, population size, and urbanisation (β = 0.032, p = .002). The association weakens when tertiary enrolment is added, suggesting that AI readiness overlaps with broader human-capital conditions. A robustness check using self-employment produces a different pattern, reinforcing the distinction between formal business entry and necessity-based entrepreneurship. The findings indicate that government AI readiness forms part of the institutional and digital environment associated with formal business formation, but its relevance cannot be separated from education, development, and administrative capacity.
Keywords
AI Readiness ; Entrepreneurship ; Digital governance
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