Poverty alleviation through e-commerce: Village involvement and demonstration policies in rural China

• Published in: Journal of Integrative Agriculture Vol. 20; no. 4; pp. 998 - 1011
• Main Authors: PENG, Chao, MA, Biao, ZHANG, Chen
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.04.2021; Administration and Management Institute, Ministry of Agriculture and Rural Affairs, Beijing 102208, P.R.China%School of Agricultural Economics and Rural Development, Renmin University of China, Beijing 100872, P.R.China%Institute of Population and Labor Economics, Chinese Academy of Social Sciences, Beijing 100006, P.R.China; KeAi Communications Co., Ltd
• Subjects: agricultural development; China; e-commerce; economic development; Heckit method; humans; income; infrastructure; Internet; issues and policy; National Rural E-commerce Comprehensive Demonstration Project; poverty alleviation; rural poverty; surveys; villages; China; income; poverty alleviation; Heckit method; National Rural E-commerce Comprehensive Demonstration Project
• ISSN: 2095-3119; 2352-3425
• DOI: 10.1016/S2095-3119(20)63422-0

The diffusion of e-commerce has played a significant role in recent rural economic development in China. E-commerce is also considered as an efficient channel to alleviate poverty in rural China. Voluminous studies have investigated the contribution of e-commerce to agricultural development, yet it is lacking empirical evidence as to the effects of e-commerce on rural poverty alleviation. Since the year of 2014, in order to develop rural e-commerce, Chinese government launched the National Rural E-commerce Comprehensive Demonstration Project. This gradual involvement policy offered a natural experiment for evaluation of e-commerce. Based on village-level survey data from rural China and Heckit method, our study finds that rural e-commerce has a significantly positive effect on rural income. Moreover, the effect is inverted U-shaped for the relative-poverty villages. The estimation of the propensity scores matching model confirms that the results are robust. The following policy recommendations are proposed: (1) policy support to rural e-commerce should prioritize the poverty-stricken villages. By doing so, the marginal income effects of e-commerce will be maximized. (2) Investment in internet infrastructure and establishment of human resources for e-commerce in rural areas will have spillover effects, increasing rural income through the “digital dividend”.