IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v83y2024ics1043951x23001700.html

Place-based polices and e-commerce development in rural China

Author

Listed:
  • Zhao, Zhao
  • Liu, Ruiwen
  • Wang, Qi

Abstract

This paper estimates the effects of a prominent place-based policy in rural areas of China, the Rural E-commerce Demonstration Counties (henceforth REDC), on the local e-commerce development. Relying on plausible exogenous variation in place-based policies caused by the staggered implementation of REDC and a difference-in-differences approach, we show that the REDC program has significantly increased the start-up of online business entities and helped them to survive. We also observe that the REDC program plays a positive role in improving logistics infrastructure and nurturing relevant talents. Moreover, we find that remote counties and counties with smaller market potential benefits more from the REDC program. Further analysis finds that the REDC program also has a positive impact on the scale of e-commerce, business, and local labor market. This paper provides new evidence on the positive effects of place-based policies on local development.

Suggested Citation

  • Zhao, Zhao & Liu, Ruiwen & Wang, Qi, 2024. "Place-based polices and e-commerce development in rural China," China Economic Review, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:chieco:v:83:y:2024:i:c:s1043951x23001700
    DOI: 10.1016/j.chieco.2023.102085
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X23001700
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2023.102085?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Matthew Gentzkow, 2006. "Television and Voter Turnout," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(3), pages 931-972.
    2. David Atkin & Amit K. Khandelwal, 2020. "How Distortions Alter the Impacts of International Trade in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 213-238, August.
    3. repec:hal:pseose:halshs-01155633 is not listed on IDEAS
    4. Shenoy, Ajay, 2018. "Regional development through place-based policies: Evidence from a spatial discontinuity," Journal of Development Economics, Elsevier, vol. 130(C), pages 173-189.
    5. Clément de Chaisemartin & Xavier D’Haultfœuille, 2023. "Two-way fixed effects and differences-in-differences with heterogeneous treatment effects: a survey," The Econometrics Journal, Royal Economic Society, vol. 26(3), pages 1-30.
    6. Hasan, Rana & Jiang, Yi & Rafols, Radine Michelle, 2021. "Place-based preferential tax policy and industrial development: Evidence from India’s program on industrially backward districts," Journal of Development Economics, Elsevier, vol. 150(C).
    7. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    8. Edward L. Glaeser & Joshua D. Gottlieb, 2008. "The Economics of Place-Making Policies," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 155-253.
    9. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    10. M. Shahe Emran & Zhaoyang Hou, 2013. "Access to Markets and Rural Poverty: Evidence from Household Consumption in China," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 682-697, May.
    11. Li, Pei & Lu, Yi & Wang, Jin, 2016. "Does flattening government improve economic performance? Evidence from China," Journal of Development Economics, Elsevier, vol. 123(C), pages 18-37.
    12. Ku, Hyejin & Schönberg, Uta & Schreiner, Ragnhild C., 2020. "Do place-based tax incentives create jobs?," Journal of Public Economics, Elsevier, vol. 191(C).
    13. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    14. Wang, Jin, 2013. "The economic impact of Special Economic Zones: Evidence from Chinese municipalities," Journal of Development Economics, Elsevier, vol. 101(C), pages 133-147.
    15. Behaghel, Luc & Lorenceau, Adrien & Quantin, Simon, 2015. "Replacing churches and mason lodges? Tax exemptions and rural development," Journal of Public Economics, Elsevier, vol. 125(C), pages 1-15.
    16. Ellis, Jesse & Madureira, Leonardo & Underwood, Shane, 2020. "The Causal Effects of Proximity on Investment: Evidence from Flight Introductions," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 55(6), pages 1978-2004, September.
    17. Matias Busso & Jesse Gregory & Patrick Kline, 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," American Economic Review, American Economic Association, vol. 103(2), pages 897-947, April.
    18. Victor Couture & Benjamin Faber & Yizhen Gu & Lizhi Liu, 2021. "Connecting the Countryside via E-Commerce: Evidence from China," American Economic Review: Insights, American Economic Association, vol. 3(1), pages 35-50, March.
    19. Hans R. A. Koster & Jos van Ommeren, 2019. "Place-Based Policies and the Housing Market," The Review of Economics and Statistics, MIT Press, vol. 101(3), pages 400-414, July.
    20. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    21. Kong, Dongmin & Qin, Ni & Xiang, Junyi, 2021. "Minimum wage and entrepreneurship: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 320-336.
    22. Enrico Moretti, 2014. "Local Economic Development, Agglomeration Economies, and the Big Push: 100 Years of Evidence from the Tennessee Valley Authority," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 275-331.
    23. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    24. Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2010. "Going NUTS: The effect of EU Structural Funds on regional performance," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 578-590, October.
    25. Xuan Tian & Jiajie Xu, 2022. "Do Place-Based Policies Promote Local Innovation and Entrepreneurship? [A model of growth through creative destruction]," Review of Finance, European Finance Association, vol. 26(3), pages 595-635.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiaojing Li & Yanhua Li & Zhe Chen, 2024. "Impact of Rural E-Commerce Participation on Farmers’ Household Development Resilience: Evidence from 1229 Farmers in China," Agriculture, MDPI, vol. 14(5), pages 1-21, April.
    2. Huang, Tianyu & Quan, Yiyue & Li, Nan, 2024. "Reallocate to the right place: The heterogeneous effect of internet use on factor allocation of rural households in China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1328-1346.
    3. Cai, Guowei & Yao, Tao & Wang, Xun, 2025. "Market accessibility and poverty alleviation: Evidence from China," Journal of Asian Economics, Elsevier, vol. 100(C).
    4. Wang, Lei & Sun, Yongming, 2025. "Digital dividends? Rural E-commerce policy and urban-rural income disparity in China," Telecommunications Policy, Elsevier, vol. 49(10).
    5. Liu, Xinyu & Li, Songze & Huang, Jikun & Xiao, Han, 2025. "Transforming consumption: How E-commerce reshape online shopping behavior and household spending," China Economic Review, Elsevier, vol. 92(C).
    6. Liu, Sheng & Wei, Xiahai & Du, Yuhong, 2025. "Can rural digital economy mitigate local population outflow: Evidence from China," Journal of Asian Economics, Elsevier, vol. 99(C).
    7. Zhang, Xuecui & Chen, Lu & Liu, Xiuyan, 2025. "Does targeted poverty alleviation foster rural entrepreneurship? evidence from china’s township-level panel data," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 1927-1945.
    8. Cheng, Shiyu & Song, Yaxiang & Tu, Yao, 2025. "Place-based policies, creation and reallocation effects on city exports: Insights from China's cross-border E-commerce comprehensive pilot zones," China Economic Review, Elsevier, vol. 93(C).
    9. Lyubing, Feng & Lijun, Zang & Xianguo, Yao, 2024. "The impact of internet use on entrepreneurial behavior and income: Evidence from Chinese rural households," Journal of Asian Economics, Elsevier, vol. 93(C).
    10. Jialong Zheng & Xintong Liang & Junkai Ma & Guangsi Li, 2025. "Rural e-commerce and agricultural total factor productivity: Evidence from China," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 71(10), pages 550-563.
    11. Jie Wang & Zhijian Cai & Zhen Zeng & Chang Liu, 2025. "How Do Digital Skills Affect Rural Households’ Incomes in China? An Explanation Derived from Factor Allocation," Sustainability, MDPI, vol. 17(20), pages 1-18, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abagna, Matthew Amalitinga & Hornok, Cecília & Mulyukova, Alina, 2025. "Place-based Policies and Household Wealth in Africa," Journal of Development Economics, Elsevier, vol. 176(C).
    2. Gallé, Johannes & Overbeck, Daniel & Riedel, Nadine & Seidel, Tobias, 2024. "Place-based policies, structural change and female labor: Evidence from India’s Special Economic Zones," Journal of Public Economics, Elsevier, vol. 240(C).
    3. Jia, Junxue & Ma, Guangrong & Qin, Cong & Wang, Liyan, 2020. "Place-based policies, state-led industrialisation, and regional development: Evidence from China's Great Western Development Programme," European Economic Review, Elsevier, vol. 123(C).
    4. Görg, Holger & Mulyukova, Alina, 2024. "Place-based policies and firm performance: Evidence from Special Economic Zones in India," European Economic Review, Elsevier, vol. 165(C).
    5. Gao, Ming & Gu, Qiankun & He, Shijun, 2022. "Place-based policies, administrative hierarchy, and city growth: Evidence from China," Economic Modelling, Elsevier, vol. 115(C).
    6. Shiyi Chen & Wanlin Liu & Hong Song & Qing Zhang, 2024. "Government‐led e‐commerce expansion project and rural household income: Evidence and mechanisms," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 150-174, January.
    7. Chaurey, Ritam & Le, Duong Trung, 2018. "Infrastructure Grants and the Performance of Microenterprises," IZA Discussion Papers 11749, IZA Network @ LISER.
    8. Cheng, Shiyu & Song, Yaxiang & Tu, Yao, 2025. "Place-based policies, creation and reallocation effects on city exports: Insights from China's cross-border E-commerce comprehensive pilot zones," China Economic Review, Elsevier, vol. 93(C).
    9. Nie, Liang & Nie, Cheng, 2025. "Does place-based policy encourage energy efficiency? Evidence from development zones in China," Energy Economics, Elsevier, vol. 150(C).
    10. Gianluca Monturano & Giuliano Resce & Marco Ventura, 2026. "Short-term Impact of Financial Support to Inner Areas," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 12(1), pages 217-256, March.
    11. Cheng Luo & Yu Du & Yu Xia & Zhen Yan, 2025. "Place‐Based Policies, New Agricultural Operating Entities Development, and Structural Transformation in China," Agricultural Economics, International Association of Agricultural Economists, vol. 56(6), pages 1042-1057, November.
    12. Neumark, David & Simpson, Helen, 2015. "Place-Based Policies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1197-1287, Elsevier.
    13. Mane, Klint & Park, Geunyong & Shen, Ande, 2025. "High-tech clusters, labor demand, and inequality: Evidence from “Made in China 2025”," Regional Science and Urban Economics, Elsevier, vol. 115(C).
    14. Kuiper, Niels M. & van Duijn, Mark & van der Vlist, Arno J., 2025. "Do urban redevelopment projects attract jobs? Evidence from the Dutch National Restoration Fund," Regional Science and Urban Economics, Elsevier, vol. 114(C).
    15. Bhukta, Rikhia, 2025. "Factories and Fertility: The Impact of Manufacturing Growth on Son Preference," GLO Discussion Paper Series 1664, Global Labor Organization (GLO).
    16. Niu, Geng & Jin, XiaoShu & Wang, Qi & Zhou, Yang, 2022. "Broadband infrastructure and digital financial inclusion in rural China," China Economic Review, Elsevier, vol. 76(C).
    17. Li, Donghui & Chen, Wei & Hao, Kaixuan, 2025. "Place-based policies and local technology spillovers: Evidence from national high-tech zones in China," Research in International Business and Finance, Elsevier, vol. 73(PA).
    18. Huang, Xuhui & Zhou, Tao & Zhang, Ning, 2025. "How does the carbon market influence the marginal abatement cost? Evidence from China's coal-fired power plants," Applied Energy, Elsevier, vol. 378(PA).
    19. Tien Manh Vu & Hiroyuki Yamada, 2022. "Do enterprise zones promote local business development? Evidence from Vietnam," Journal of Regional Science, Wiley Blackwell, vol. 62(4), pages 1206-1224, September.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:83:y:2024:i:c:s1043951x23001700. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.