How does rural e-commerce affect innovation and entrepreneurship

With the deep integration of rural industry and digital economy, rural e-commerce has developed as an effective way which transforming the mode of agriculture and increasing farmers’ income. Because of the comprehensive promotion of the digital technology and agriculture project, the rural network retail sale in China has reached 2.8 trillion yuan in 2024. Rural e-commerce provided a core driving force for rural industrial upgrading and rural innovation and entrepreneurship development. This study uses the two-way fixed effect model with the panel data of 26 provinces in China from 2014 to 2022 to examine the relationship of rural e-commerce and innovation and entrepreneurship. Results show that: (1) Rural e-commerce has a positive effect on rural innovation and entrepreneurship, and the conclusion is robust; (2) Rural e-commerce positively promotes rural innovation and entrepreneurship through capital-sinking effect and resource-integrated effect; (3) According to regional characteristics, the rural e-commerce boosts the innovation and entrepreneurship in different ways. The following suggestions are put forward: (1) Optimize the top-level design layout and continuously release the potential of rural e-commerce; (2) Increase the inclusiveness of digital finance and extend the agro-industry chain to attract innovative and entrepreneurial talents; (3) Increase R&D funding to stimulate entrepreneurial activity in rural areas; (4) Strengthen basic social security and employment support.