Revenue-increasing effect of rural e-commerce: A perspective of farmers' market integration and employment growth

Abstract

This study uses village and household matching information from the 2018 China Labor-force Dynamic Survey to analyze the impact of rural e-commerce on farmers’ revenue. The outcomes of the baseline regression and robustness discussions show that rural e-commerce greatly improved farmers’ revenue. After solving endogeneity problems in the model using rural clan power as the instrumental variable, the influence of e-commerce on farmers’ revenue is still significantly positive. Further analysis suggests that rural e-commerce directly affects farmers’ revenue by promoting farmers' market integration, and indirectly affects it by expanding affiliated industries that can promote employment growth. Furthermore, in the case of a higher level of transportation infrastructure development, the impact of rural e-commerce-affiliated industries on farmers’ revenue will be greater. However, not all farmers receive the same benefits from e-commerce. Farmers with more human capital receive more benefits from e-commerce. Our results have important policy implications for developing countries that hope to grow farmers’ revenue and rural development through e-commerce.