Rural E-Commerce and Income Inequality: Evidence from China

Common prosperity is the fundamental driving force of rural revitalization, as well as the foundation for achieving sustainable economic development. The e-commerce to the countryside policy has energized the rural economy, helping to improve household economic resilience and reduce income stratification, thereby promoting the inclusive and sustainable development of the digital economy. Drawing on panel data collected from rural fixed observation points in Henan Province during 2009–2022, this study employs a staggered difference-in-differences (DID) approach to evaluate the impact of China’s e-commerce to the countryside policy on farmers’ income and income inequality. The empirical results reveal that the rural e-commerce policy significantly increases farmers’ income while mitigating income inequality. The underlying mechanisms function through three synergistic pathways: industrial structural upgrading, manifested through tri-sector integration driven by rural enterprise development; factor allocation restructuring, evidenced by productivity gains from optimized labor–capital reallocation; and enhanced market inclusion through digital technology empowerment that lowers participation barriers. Heterogeneity analysis indicates that the e-commerce to the countryside policy exhibits pro-poor characteristics, with its income-enhancing and equalizing effects being particularly pronounced in agricultural areas, traditional villages, county-level civilized villages, underdeveloped regions, registered poverty-stricken villages, and households with low human, physical, and financial capital endowments. These findings confirm the inclusive development efficacy of rural e-commerce among vulnerable populations. Consequently, the study provides a replicable policy implementation framework for achieving common prosperity objectives.