Impact of e-commerce on income inequality: evidence from rural China based on cross-county panel data

Xinxin Ma and Sho Komatsu

Information Technology for Development, 2025, vol. 31, issue 3, 635-663

Abstract: Although information and communications technologies (ICTs) are developing rapidly worldwide, evidence of the relationship between e-commerce and regional income inequality in the rural areas of a developing country remains scarce. Using original cross-county panel data, this study investigates the impact of e-commerce on regional income inequality in rural China, taking into consideration endogeneity issues. The results indicate that e-commerce may increase income inequality in developed counties but reduce income inequality in the less-developed counties; however, the total effect of e-commerce on overall income inequality is insignificant. The decomposition results show that differences in e-commerce accessibility contribute to widening the income inequality between developed and less-developed counties. In contrast, the differences in the income returns of e-commerce usage contribute to reducing income inequality. The empirical results suggest that a policy promoting e-commerce development may reduce income inequality in less-developed regions.

Date: 2025
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DOI: 10.1080/02681102.2024.2397340

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