Transforming Rural Trade: The Impact of Government-Initiated E-commerce Platform on Local Specialty Sales

Xintong Han (), Jan Victor Dee () and Shaojia Wang ()
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Xintong Han: Laval University, Faculty of Business Administration, Department of Marketing, 2325 Rue de la Terrasse, Québec, G1V 0A6, Canada
Jan Victor Dee: Concordia University, Department of Economics, 1455 Boulevard de Maisonneuve Ouest, Montreal, H3G 1M8, Canada
Shaojia Wang: Concordia University, Department of Economics, 1455 Boulevard de Maisonneuve Ouest, Montreal, H3G 1M8, Canada

No 23-03, Working Papers from NET Institute

Abstract: This paper empirically evaluates the impact of a Government-Initiated Non-Profit E-commerce Platform (GNEP) on specialty agricultural sales, focusing specifically on Pu’er tea in China. Using a difference-in-differences methodology and a comprehensive panel dataset that covers over 90% of local tea farmers, we uncover a marked substitution effect. The implementation of GNEP leads to an average decline of 11.22% in offline household sales, while online sales see an uptick of 16.88%. Further analysis confirms a universal channel shift from offline to online sales, irrespective of both production levels and tea quality. Contrary to expectations, the overall tea sales volume remains largely stable post-launch. Additionally, premium-quality teas experience a 2.42% price boost online, while regular teas show a 0.40% decrease compared to offline prices. Mechanism analysis further indicates that the increase in online sales is driven primarily by the intensive margin instead of the extensive margin. Although the platform does not significantly expand the number of farmers engaging in online sales, it offers a cost-effective avenue for diversifying product offerings and achieving higher prices for premium-quality products. Our study illuminates the transformative role of e-commerce platforms in rural economic development and provides essential insights for policymakers and practitioners.

Keywords: government-initiated non-profit e-commerce platform (GNEP); difference-in-differences (DiD); tea sales; online channels (search for similar items in EconPapers)
JEL-codes: L81 M31 Q13 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2023-09
New Economics Papers: this item is included in nep-agr and nep-pay
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