by Ben Faber, Victor Couture, Lizhi Li and Yizhen Gu 

For a draft of the paper, see here.

The number of people buying and selling products online in China has grown from practically zero in 2000 to more than 400 million by 2015. Most of this growth has occurred in cities. In this context, the Chinese government recently announced the expansion of e-commerce to the countryside as a policy priority with the aim to close the rural-urban economic divide. As part of this agenda, the government entered a collaboration with one of the largest Chinese e-commerce platforms through which consumers and producers can buy and sell products of all kinds. The program aims to provide the necessary transport logistics to ship products to and sell products from tens of thousands of villages that were largely unconnected to e-commerce. As part of this operation, the firm installs an e-commerce terminal at a central village location where households can buy and sell products through the terminal manager’s account. This paper combines a new collection of survey and transaction microdata with a randomized control trial (RCT) across villages that we implement in collaboration with the Chinese e-commerce firm. We use this empirical setting to provide evidence on the potential of e-commerce integration to foster economic development in the countryside, the underlying channels and the distribution of the gains from e-commerce across households and villages. 

See poster here.