From Street Stalls to Screens: The Price Integration of China’s Cities

Marina Glushenkova and Marios Zachariadis

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: We investigate the extent to which the substantial decline in price dispersion across Chinese cities can be attributed to the emergence and expansion of e-commerce. We find that online trade exerted a strong negative effect on bilateral price differences across Chinese cities over time for the period from 2006 to 2021. Furthermore, we find that the impact of online trade on price integration was even more pronounced for cities located farther apart geographically. As a result of this mechanism, price dispersion declined significantly over the study period, reaching levels comparable to those observed among core euro-area economies by the end of the sample period.

Keywords: market segmentation; price convergence; e-commerce; road infrastructure; welfare (search for similar items in EconPapers)
JEL-codes: E3 F4 H54 O5 R4 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2026-08-07
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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:02-2026

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