The impact of e-commerce activities on rural household leverage

Abstract

ABSTRACT This article provides new evidence on the connection between e-commerce and rural household leverage in China. We find that e-commerce activities increase the leverage ratio of Chinese rural households significantly, especially in the west region, households headed by men, and households that have not experienced borrowing denials. The results are still robust when using an instrumental variable approach to solve endogenous problems. The findings suggest that participation in e-commerce may relieve the constraint of formal credit, which will boost the household leverage.