Recent Trends in Social Studies Original Research
Digital Governance and SME Growth: Quasi-Experimental Evidence from the "Maximum One-Time Visit” Reform in China
Abstract
Does digital administrative reform boost the growth of small and medium-sized enterprises (SMEs)? This paper exploits the staggered rollout of the "Maximum One-Time Visit" (MTV) reform across counties in Zhejiang Province, China, to provide causal evidence. Using a county-by-year panel dataset constructed entirely from publicly available statistical yearbooks for the period 2016–2018, we find that the reform significantly increased private-sector employment—a key proxy for SME expansion—by approximately 4.8% within the first year of implementation. To ensure methodological rigor, we complement the baseline two-way fixed effects estimator with the doubly robust estimator, which accounts for heterogeneous treatment effects in staggered adoption settings; the aggregate ATT from this approach is nearly identical (5.1%, p<0.05), reinforcing the validity of our findings. Event-study estimates show no pre-trends, supporting a causal interpretation. The effects are stronger in counties with initially weaker market institutions, suggesting the reform substitutes for deficient formal governance. Furthermore, we explore the mechanism of institutional transaction cost reduction, arguing that digital governance alleviates information asymmetry and bureaucratic frictions. Due to data availability constraints, this study focuses on short-term impacts; longer-term dynamics remain a promising avenue for future research. The findings highlight how low-cost digital public administration can foster local economic development by reducing transaction costs for small businesses.
Keywords
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