Digital Environment, Digital Literacy, and Farmers’ Entrepreneurial Behavior: A Discussion on Bridging the Digital Divide

To promote sustainable rural development and digital transformation and based on 2018 county-level digital rural indices and microdata from the China Family Panel Studies (CFPSs), this study examines how the digital environment impacts the entrepreneurial behavior of rural households. The results of the study were as follows: (1) The optimization of the digital environment significantly increases entrepreneurial possibilities for farmers, indicating that, the higher the digital rural development index, the easier it is for farmers to start their own businesses. (2) As digital village construction progresses, the impacts of digital hard environments on rural household entrepreneurship decrease, while the influence of digital soft environments increases. (3) Mechanism analysis reveals that digital literacy facilitates farmers’ entrepreneurial behavior through the digital environment. Farmers with stronger intentions to participate in commercial activities and information acquisition more actively utilize the digital environment to seek business opportunities and make entrepreneurial decisions. (4) Further analysis reveals an inverted U-shaped relationship between the “second-level digital divide”, represented by digital literacy, and the development of digital villages. (5) To fully implement China’s Digital Rural Strategy, it is crucial to not only establish digital infrastructure but to also enhance farmers’ digital literacy and promote the development of a digital soft environment.