How e-commerce reshape rural industrial transition: Evidence from China’s rural e-commerce demonstration counties program

In the new context of the digital economy, e-commerce based on digital platforms has become an important driving force for rural industrial transformation especially in developing countries. Based on the quasi-natural experiment of the Rural E-Commerce Demonstration County (REDC) program, the study uses the county-level data from China (2000–2020), and employs a time-varying DID method combined with machine learning techniques to explore the impact of rural e-commerce on industrial structure transformation. The findings indicate that the REDC program significantly fosters industrial upgrading, with varying effects across regions due to differences in resource endowments and development levels. Mechanism analysis suggests that rural e-commerce drives industrial upgrading through three primary channels: labor reallocation, dynamic adjustment of entrepreneurial resources, and industrial agglomeration. Further analysis indicates that rural e-commerce also plays a role in promoting coordinated industrial development. Utilizing machine learning methods, we identify a nonlinear relationship between rural e-commerce and industrial upgrading, which unfolds in three distinct stages: initial adaptation, rapid upgrading, and stable development. This paper proposes that differentiated e-commerce programs, smooth factor mobility systems, and industrial planning will assist rural areas in adapting to the e-commerce context and thereby facilitate rural economic transformation.