The literature traditionally has focused its attention on the relationship between innovation and entrepreneurial activity . From this perspective, new innovations are accompanied by digital transformations that enhance value creation. However, it is also important to consider the effect of digital dividends on society overall as well as on entrepreneurship activity. Studies generally do not address this latter possibility. This paper analyses the theoretical and quantitative effects of digital transformation and digital dividends on entrepreneurial activity, that is, the broader developmental benefits that using these technologies brings, in the shape of digital transformation. Partial least square (PLS) estimation is used to develop an empirical estimation for the case of 29 European countries.