Linking farmers to markets: Does cooperative membership facilitate e-commerce adoption and income growth in rural China?

Abstract

This study uses the 2020 China Rural Revitalization Survey to investigate the associations between cooperative membership, E-commerce adoption, and household income. Using the conditional mixed process framework, we find that cooperative membership inhibits rural households’ e-commerce adoption, while cooperative membership and e-commerce adoption significantly increase rural household income. The two-stage predictor substitution approach confirms this result. Further, participating in different types of cooperatives has heterogeneous effects on the e-commerce adoption decision and household income growth. However, regardless of whether or which cooperative households participate in, e-commerce adoption significantly increases household income. Policymakers can work with e-commerce enterprises, leverage the current cooperatives, especially the village stock economic and market cooperative, and set up e-commerce cooperatives to popularize e-commerce-related knowledge to encourage e-commerce adoption among rural households. Further, considering the regional disparities in e-commerce adoption, it is essential to strengthen the policy support for the rural households residing in Central and Western China to narrow the “digital divide.”