Impact of e-commerce development on rural income: Evidence from counties in revolutionary old areas of China

Abstract Digital technology has enormous potential in rural revitalisation, thus providing impetus for improving the well-being of rural residents in underdeveloped areas. This study takes the policies of e-commerce in rural areas as an intervention in the development of e-commerce. It uses the panel data from 321 counties in the old revolutionary areas of China from 2003 to 2020 to empirically explore the impact of e-commerce development on the income of rural residents. Results show that e-commerce significantly improves the income and well-being of rural residents in old revolutionary areas. Propensity score matching and entropy balance matching are used to overcome group differences in covariate features, and the estimation results are consistently robust. In terms of mechanisms, e-commerce development increases per capita income in old revolutionary areas by promoting three aspects significantly: agricultural revitalisation, non-agricultural employment, and government support efforts. On the other hand, the heterogeneity analysis shows that e-commerce plays a diminishing role in increasing income in the eastern, central, and western regions.