Can E-commerce alleviate household financial vulnerability?

Abstract

E-commerce, as a crucial component of the digital economy, plays a vital role in reinforcing and broadening the successes of poverty alleviation efforts. Utilizing data from the China Household Finance Survey (CHFS) covering 2015 to 2019 and the China Family Panel Studies (CFPS) from 2014 to 2020, this paper employs a multi-stage differential model system. It examines how the establishment of e-commerce demonstration counties impacts household financial vulnerability and the mechanisms involved, regarding the National Rural E-commerce Comprehensive Demonstration Project (NRECDP) as a natural experiment. The findings indicate that e-commerce can significantly alleviate household financial vulnerability. This effect occurs through three channels: employment enhancement, entrepreneurship promotion, and consumption structure upgrading. Furthermore, variations appear based on region, age, material capital, and human capital. This study has significant implications for maintaining the successes of poverty alleviation efforts and realizing shared prosperity.