<p>This study exploits the staggered establishment of municipal Big Data Management Agencies (BDMAs) across China as a quasi‑natural experiment to investigate how digital government development affects urban entrepreneurial vitality. Using panel data from 254 prefecture‑level cities between 2011 and 2022, we employ a staggered difference‑in‑differences design for causal identification. Results indicate that the rollout of BDMAs significantly enhances entrepreneurial activity in treated cities, with effects that persist and strengthen dynamically over time. Mechanism analysis suggests that digital government development primarily improves the local business environment by lowering institutional transaction costs and increasing government transparency, which in turn boosts entrepreneurs’ policy expectations and development confidence. Heterogeneity analysis reveals that the effect is more pronounced in small‑ and medium‑sized cities, cities where BDMAs were established later, and cities with a relatively lower share of tertiary industry. By examining digital transformation in government governance, this study provides empirical evidence on the linkages between institutional innovation, information infrastructure, and regional entrepreneurship, offering policy insights for leveraging digital governance to foster high‑quality economic development.</p>