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Digital finance, rural E-commerce development and consumption upgrading

Author

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  • Chen, Wei
  • Li, Jiawei

Abstract

This study, based on the micro-panel data from the China Family Panel Studies (CFPS) and the digital financial inclusion index at the prefecture level, focuses on the internal mechanisms through which rural e-commerce and digital finance synergistically promote consumption upgrading. Using a multi-period difference-in-differences (DID) approach, this research evaluates the effects of e-commerce demonstration policies and analyzes the transmission pathways through a mediation effect model. The findings reveal that e-commerce demonstration policies significantly enhance consumption upgrading among rural households. Digital finance serves as a crucial mediating variable, amplifying the promotional effect of e-commerce development on consumption upgrading by reducing transaction frictions and optimizing resource allocation. Further heterogeneity analysis indicates that the policies have a more pronounced effect on stimulating consumption upgrading in regions with lower levels of economic development.

Suggested Citation

  • Chen, Wei & Li, Jiawei, 2025. "Digital finance, rural E-commerce development and consumption upgrading," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    • Handle: RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925004387
    DOI: 10.1016/j.irfa.2025.104351
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