Is e-commerce widening or narrowing the income distribution gap among Chinese households?

Yan Mei, Nuoyan Lin, Bangqi Hu and Xihua Zhang

China Agricultural Economic Review, 2025, vol. 17, issue 4, 589-606

Abstract: PurposeAlthough many researchers have studied the benefits of the applications of e-commerce, few have examined the relationship between e-commerce and its effects on household income distribution. This study explores the effects of e-commerce development on household income distribution in different regions of China.Design/methodology/approachThis study uses a two-way fixed effect model for empirical analysis based on matched data from the E-commerce Development Index and the China Family Panel Studies database. The instrumental variables method is used for robustness testing.FindingsThe research findings indicate the following: (1) The development of e-commerce significantly reduces income inequality among Chinese households. For every 10% increase in e-commerce development, the income gap in China shrinks by 2.38%, with a reduction of 2.97 and 0.47% in urban and rural areas, respectively. (2) The reduction in income inequality due to e-commerce development is more pronounced in economically advanced regions. (3) The development of e-commerce in the eastern and western regions has a greater impact on reducing income inequality in urban than rural areas. In contrast, the opposite effect is observed in the central region.Originality/valueThis study contributes to existing research by examining the effects of e-commerce development on household income distribution. It has important theoretical and practical implications for issues such as narrowing the urban–rural gap.

Keywords: E-commerce; Household income distribution; Digital divide; Two-way fixed-effects model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:caerpp:caer-10-2023-0276

DOI: 10.1108/CAER-10-2023-0276

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