Development of e-commerce and agricultural productivity: evidence from China

Purpose This paper investigates the impact of China's “Rural E-commerce Demonstration County” (REDC) policy on agricultural productivity, with a focus on the mechanisms through which e-commerce shapes agricultural development. Design/methodology/approach Using county-level data, the study estimates the causal effects of the REDC policy on agricultural total factor productivity (TFP). Robust checks and mechanism analyses are conducted to ensure reliability and to explore channels, including market incentives, resource reallocation, and institutional support. Findings The REDC policy significantly improves agricultural TFP in pilot counties, with an average increase of 5.4%. The effect is primarily driven by enhanced production incentives and efficient reallocation of land and labor. The policy's impacts are stronger in counties with confirmed land rights, access to digital credit, advanced digital infrastructure, and higher grain production capacity. In addition to productivity gains, the policy boosts total agricultural output and rural household income. Originality/value The study provides new evidence on how e-commerce policies can promote rural productivity in developing countries. It highlights the potential of digital platforms to strengthen rural markets, optimize resource allocation, and advance sustainable agricultural development.