From Fields to Online Markets: How E‐Commerce Development Drives Rural Household Entrepreneurship in China

ABSTRACT The benefits of e‐commerce development for rural households have received extensive attention, but we still know little about its effect on entrepreneurial behaviours in China. We regard the national e‐commerce demonstration city construction (NEDCC) policy as a quasi‐natural experiment and use a staggered difference‐in‐differences (DID) method to determine the potential causal effect. Results show that e‐commerce development significantly promotes rural household entrepreneurial behaviours, supported by several robustness tests. In particular, we use the Bacon decomposition method to guarantee the reliability of staggered DID estimates and exclude potential spillover effects. Moreover, industrial upgrading, credit constraint easing, informational advantages and social capital accumulation may explain this positive effect. Furthermore, we reveal the inclusive impact of e‐commerce development, finding that it is more likely to stimulate rural household entrepreneurship in some disadvantaged areas. However, this effect is limited by the digital divide due to the threshold for e‐commerce tool users. Our findings contribute to research on digital entrepreneurship and the welfare of e‐commerce development in developing countries.