Can E-commerce development improve farmers' incomes? Evidence from prefecture-level data and the spatial difference-in-difference approach

The penetration of E-commerce into rural areas has created unprecedented opportunities for rural revitalisation and increased farmers' incomes. While the impact of E-commerce development on income growth has been widely discussed, its spatial spillover effects and subsequent mechanisms remain insufficiently explored. This study utilises panel data of 278 prefecture-level cities in China and employs a spatial difference-in-difference model incorporating the spatial Durbin model to explore the contribution of E-commerce development to farmers' incomes, focussing on the direct mechanisms and spatial spillover effects associated with the characteristics of E-commerce. Results indicate that E-commerce development promotes local farmers' income growth and exerts a positive spillover effect on neighbouring cities. The significant positive direct contribution effect is achieved through mediating effects of technological innovation and capital investment, while the mediating effect of industrial structure upgrading is found to be significantly negative, indicating farmers remain incapable of obtaining digital dividends from emerging economic opportunities. E-commerce development is also found to better increase farmers' incomes in less developed regions and regions with lower digitalisation levels, indicating a stronger impetus in the early stages of development.