Exploring the income impact of rural e-commerce comprehensive demonstration project and determinants of county selection

The development of rural e-commerce in China is viewed as an opportunity to increase rural income. Using panel data from 592 national-level key poverty-stricken (NLKPS) counties from 2014 to 2020, we confirm that the National Rural E-commerce Comprehensive Demonstration Project (NRECDP), launched by the Chinese government, delivers significant rural income growth for selected counties by providing financial support. Digital inclusive finance has facilitated rural e-commerce development, thereby promoting rural income. Our study uses the endogeneity switching regression (ESR) model to address self-selection bias and finds that NRECDP participation increases rural income by -12.97%. The determinants of participation in the NRECDP include levels of economic development, e-commerce development, infrastructure development, industry structure, and digital inclusive finance. Additionally, the determinants of rural income include education levels and population density. Moreover, our heterogeneity analysis reveals that the rural income growth effect of NRECDP involvement is more significant for NLKPS counties in non-ethnic regions, central regions, higher industry structures, and the three regions and three prefectures. Additionally, entrepreneurship serves as a potential channel linking NRECDP implementation and rural income growth.

Mengzhen Wang, Xingong Ding, Pengfei Cheng