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What determines the effectiveness of government entrepreneurship policies on the regional development of entrepreneurial activities in China? Using panel data analysis, this study develops a comprehensive framework that examines the effects of various factors, including government efficiency and government support for business, finance and technology, on facilitating the creation of new ventures. Based on provincial data collected between 2009 and 2014, we find that the level of infrastructure development, government incubators and venture capital‐guided funds have positive and significant effects on entrepreneurial activities. The findings of our study suggest that local government efficiency is a fundamental precondition for entrepreneurship policies to effectively boost the regional economy.