Policy interventions and market innovation in rural China: Empirical evidence from Taobao villages

Abstract

Rural e-commerce has served as a crucial bridge between farmers and markets, playing a pivotal role in the transformation of agricultural landscapes. This study sought to examine the impact of policy interventions on the development of rural e-commerce, seeking to determine whether rural e-commerce clusters form spontaneously. To achieve these goals, we combined statistical data, data from remote sensing techniques and geographic information system (GIS), and additional data collected through web scraping, employing a dynamic regression model based on the system generalized method of moments (GMM) to conduct the empirical analysis. The research findings indicate that policy interventions play a significantly positive role in promoting rural e-commerce development. Further, the mechanism analysis demonstrates that e-commerce policies have driven the increase in the number of enterprises in rural China, and the cluster of enterprises is key to the formation of Taobao villages. This empirical evidence provides reliable support for other developing countries seeking to effectively promote rural e-commerce development through national policies.