IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v86y2025icp1510-1526.html

Do the E-commerce-induced business clusters increase the income of local rural households?

Author

Listed:
  • Qiuyun, Li
  • Xie, Mingjia
  • Tang, Yuehuan

Abstract

In recent years, rural E-commerce clusters, represented by Taobao Villages, have emerged rapidly in China, becoming a significant force influencing regional economic development. To explore the impact of the formation of Taobao Villages on the household income of local residents, this paper employs a Difference-in-Differences (DID) approach and conducts an analysis based on data from the China Family Panel Studies (CFPS) from 2010 to 2020. The empirical findings show that: Firstly, on average, the formation of Taobao Villages negatively impacts local household income, resulting in a 5.3% decrease. Secondly, the formation of Taobao Villages boost local business income but reduce migrant workers’ wage income by drawing them back from higher-paying jobs. Collectively, the opportunity cost of forgone wages outweighs the increase in business income. Finally, heterogeneity analysis reveals that this impact is uneven across different groups, with the formation of Taobao Villages exacerbating income inequality among rural households in China. These findings suggest that policymakers should adopt a cautious approach to promoting E-commerce-induced business clusters, prioritizing equity safeguards to mitigate risks of declining labor income and unequal benefits among the population.

Suggested Citation

  • Qiuyun, Li & Xie, Mingjia & Tang, Yuehuan, 2025. "Do the E-commerce-induced business clusters increase the income of local rural households?," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1510-1526.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:1510-1526
    DOI: 10.1016/j.eap.2025.04.024
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592625001547
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2025.04.024?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. Shimamoto, Daichi & Yamada, Hiroyuki & Gummert, Martin, 2015. "Mobile phones and market information: Evidence from rural Cambodia," Food Policy, Elsevier, vol. 57(C), pages 135-141.
    2. Glaeser, Edward L. & Kerr, William R. & Ponzetto, Giacomo A.M., 2010. "Clusters of entrepreneurship," Journal of Urban Economics, Elsevier, vol. 67(1), pages 150-168, January.
    3. Bing He & Da Xu & Guoqi Nan & Xiaoyu Zhang & Xiuxiu Yu, 2024. "Does the cross‐border e‐commerce comprehensive pilot zones policy affect the urban–rural income gap in China?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 83(4), pages 773-792, September.
    4. 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.
    5. Luo,Xubei & Niu,Chiyu, 2019. "E-Commerce Participation and Household Income Growth in Taobao Villages," Policy Research Working Paper Series 8811, The World Bank.
    6. Clarke, Damian, 2017. "Estimating Difference-in-Differences in the Presence of Spillovers," MPRA Paper 81604, University Library of Munich, Germany.
    7. Li, Wei & He, Weiwei, 2024. "Revenue-increasing effect of rural e-commerce: A perspective of farmers' market integration and employment growth," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 482-493.
    8. Baker, Andrew C. & Larcker, David F. & Wang, Charles C.Y., 2022. "How much should we trust staggered difference-in-differences estimates?," Journal of Financial Economics, Elsevier, vol. 144(2), pages 370-395.
    9. Goodman-Bacon, Andrew, 2021. "Difference-in-differences with variation in treatment timing," Journal of Econometrics, Elsevier, vol. 225(2), pages 254-277.
    10. Yiwu Zeng & Hongdong Guo & Yanfei Yao & Lu Huang, 2019. "The formation of agricultural e‐commerce clusters: A case from China," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1356-1374, December.
    11. Homi Kharas & Indermit Gill, 2007. "An East Asian Renaissance : Ideas for Economic Growth," World Bank Publications - Books, The World Bank Group, number 6798, April.
    12. Matheus Koengkan & José Alberto Fuinhas & Emad Kazemzadeh, 2024. "Do financial incentive policies for renewable energy development increase the economic growth in Latin American and Caribbean countries?," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 14(1), pages 161-183, January.
    13. Qi, Jiaqi & Zheng, Xiaoyong & Guo, Hongdong, 2019. "The formation of Taobao villages in China," China Economic Review, Elsevier, vol. 53(C), pages 106-127.
    14. Ping Gao & Yajun Liu, 2020. "Endogenous inclusive development of e‐commerce in rural China: A case study," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1611-1630, December.
    15. Zhang, Ning & Yang, Wantong & Ke, Haiqian, 2024. "Does rural e-commerce drive up incomes for rural residents? Evidence from Taobao villages in China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 976-998.
    16. Chen, Chen & Gan, Christopher & Li, Junpeng & Lu, Yao & Rahut, Dil, 2023. "Linking farmers to markets: Does cooperative membership facilitate e-commerce adoption and income growth in rural China?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1155-1170.
    17. Li, Xiaokang & Guo, Hongdong & Jin, Songqing & Ma, Wanglin & Zeng, Yiwu, 2021. "Do farmers gain internet dividends from E-commerce adoption? Evidence from China," Food Policy, Elsevier, vol. 101(C).
    18. Yan Mei & Danling Mao & Yuhui Lu & Wei Chu, 2020. "Effects and mechanisms of rural E‐commerce clusters on households' entrepreneurship behavior in China," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1588-1610, December.
    19. 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.
    Full references (including those not matched with items on IDEAS)

    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. Gao, Yi & Yang, Jing & Zhao, Jingzhu & Peng, Haorong, 2025. "Impact of developmental social policy on household welfare: Evidence from China’s comprehensive demonstration policy for e-commerce in rural areas," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1820-1838.
    2. Lili Li & Yiwu Zeng & Zi Ye & Hongdong Guo, 2021. "E‐commerce development and urban‐rural income gap: Evidence from Zhejiang Province, China," Papers in Regional Science, Wiley Blackwell, vol. 100(2), pages 475-494, April.
    3. Zhang, Ning & Yang, Wantong & Ke, Haiqian, 2024. "Does rural e-commerce drive up incomes for rural residents? Evidence from Taobao villages in China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 976-998.
    4. Yiwu Zeng & Lili Li & Baogang Li & Huanxin Gong & Guojun Zhang, 2025. "Impact of Big Data Products on the Entrepreneurial Performance of E-Commerce Farmers: Evidence from China," SAGE Open, , vol. 15(2), pages 21582440251, June.
    5. Zhang, Yanyuan & Wu, Xintong & Cai, Rong, 2025. "The effects of rural e-commerce on income inequality: evidence from the National Rural E-Commerce Comprehensive Demonstration policy in China," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 221-234.
    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. Dong, Siyuan & Wang, Na & Fan, Chengwei & Chen, Shi & Zhang, Lei, 2024. "E-commerce and rural women entrepreneurship ——Based on the quasi-natural experiment of “comprehensive demonstration policy” for E-commerce in rural areas," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 749-765.
    8. Luo, Yaling & Zhou, Lei & Zhang, Weike, 2025. "Can e-commerce bring dividends to rural households? New evidence from the income inequality perspective," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 363-379.
    9. Yiwu Zeng & Baogang Li & Lili Li & Guojun Zhang, 2026. "The drivers and income effect of big data use by e-commerce farmers: evidence from China," Electronic Commerce Research, Springer, vol. 26(1), pages 833-862, February.
    10. Chen, Chen & Gan, Christopher & Li, Junpeng & Lu, Yao & Rahut, Dil, 2023. "Linking farmers to markets: Does cooperative membership facilitate e-commerce adoption and income growth in rural China?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1155-1170.
    11. Yu, Yantuan & Zhang, Ning, 2025. "Towards low-carbon development through integration of technology and finance: Quasi-experimental evidence from China," Research in International Business and Finance, Elsevier, vol. 80(C).
    12. Yun Yang & Feng Hao & Xingchen Meng, 2024. "How does the national e-commerce demonstration city pilot policy boost economic growth? Evidence from China," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(4), pages 929-975, November.
    13. 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).
    14. Wei, Binhui & Zhao, Chunkai & Luo, Mingzhong, 2024. "Online markets, offline happiness: E-commerce development and subjective well-being in rural China," China Economic Review, Elsevier, vol. 87(C).
    15. Bukin, Eduard & Robinson, Sarah & Petrick, Martin, 2025. "The effects of land privatization on pasture productivity in south-eastern Kazakhstan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 158, pages 1-18.
    16. Jiang, Hongli & Hu, Wenjie & Guo, Ziqing & Hou, Yan & Chen, Tingqiang, 2024. "E-commerce development and carbon emission efficiency: Evidence from 240 cities in China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 586-603.
    17. Wang, Lei & Sun, Yongming, 2025. "Digital dividends? Rural E-commerce policy and urban-rural income disparity in China," Telecommunications Policy, Elsevier, vol. 49(10).
    18. Ichev, Riste & Valentinčič, Aljoša, 2025. "The effect of impact investing on performance of private firms," Research in International Business and Finance, Elsevier, vol. 73(PA).
    19. Shirin, Farzana, 2023. "Does Teacher Salary Support Improve Student Learning Outcomes," 2023 Annual Meeting, July 23-25, Washington D.C. 335793, Agricultural and Applied Economics Association.
    20. Rik Chakraborti & Gavin Roberts, 2023. "How price-gouging regulation undermined COVID-19 mitigation: county-level evidence of unintended consequences," Public Choice, Springer, vol. 196(1), pages 51-83, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business 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:ecanpo:v:86:y:2025:i:c:p:1510-1526. 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.journals.elsevier.com/economic-analysis-and-policy .

    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.