The rapid expansion of e-commerce has transformed market access in developing economies, yet its impact on the spatial structure of market participation remains insufficiently understood. While existing studies primarily examine welfare outcomes such as income growth and consumption smoothing, few investigate how digital platforms reshape the balance of market entry between urban and rural areas. Drawing on New Economic Geography and platform economics theory, this study proposes that e-commerce development rebalances urban–rural market vitality through three associative pathways: alleviating rural capital constraints, improving rural innovation environments, and promoting agricultural-industry agglomeration. Using county-level panel data covering 2725 Chinese counties from 2011 to 2022, we employ a Double Machine Learning (DML) framework to examine the association between designation as an “E-commerce into Rural Comprehensive Demonstration County” and changes in the urban–rural market vitality balance (URMAR). The results indicate that demonstration county designation is associated with a statistically significant reduction in urban–rural market disparity, as measured by both the Theil index and the absolute difference in new enterprise registrations. The directional URMAR indicator further reveals that this convergence is driven primarily by accelerated rural enterprise formation. Subsample analysis confirms that the rebalancing interpretation holds across counties with different baseline market structures. Mechanism analysis provides suggestive evidence consistent with all three proposed associative pathways. Heterogeneity analysis further reveals that these effects are stronger in economically developed eastern regions, in counties linked to higher-tier cities, and in secondary and tertiary industries. These findings advance a market-structure perspective on digital development that complements existing welfare-based approaches and offer policy insights for fostering balanced regional development through targeted digital and complementary investments.
Zhao et al. (Fri,) studied this question.