Digital Circulation and Sustainable Consumption: Evidence from China’s National E-Commerce Demonstration City Policy

Consumption is a basic driver of economic growth and a key part of the new development paradigm centered on the dual circulation of domestic and international markets. Treating the establishment of National E-Commerce Demonstration Cities as a quasi-natural experiment, this paper employs a multi-period difference-in-differences (DID) model and draws on panel data from Chinese prefecture-level cities spanning 2009 to 2023 to estimate the impact of the demonstration city policy on residents’ consumption levels and its transmission mechanisms. The findings are as follows: First, the National E-Commerce Demonstration City Policy significantly promotes residents’ consumption. Compared with the control group, consumption levels in demonstration cities increased by approximately 6.6%, and this result is robust to various specification checks. Second, mechanism analysis shows that the policy boosts consumption through three channels: stimulating urban entrepreneurship, upgrading smart logistics, and improving digital infrastructure. These channels together help build a more efficient consumption system. Third, heterogeneity analysis indicates that the policy effect is stronger in large cities, central and western regions, non-old industrial base cities, and cities with higher urbanization rates. These findings provide theoretical insights and practical implications for refining the e-commerce demonstration policy, tailoring it to local conditions, and unlocking consumption potential.