Does the development of e-commerce enhance rural return migration in China?
The huge divide between urban and rural areas has long been a vital issue hindering rural growth in developing countries. One critical reason is that the geographical barrier disengages rural residents to benefit from the wider markets and high-growth entrepreneurial activities, which force rural labor force to “migrate” to urban areas for better opportunities. The fact has resulted in various social problems such as “Hollow villages” and “left-behind children, women and elderly”. The issue can be largely solved with the development of Information and Communication Technologies (ICTs) because the digitization of commerce can elevate the rural economy by extending market access and enabling rural entrepreneurs to sell online. In the past decade, China has witnessed a booming of rural E-commerce. It has enabled rural residents to timely and effectively access markets regardless of their geographical restrictions, which, as a result, fostered the return of rural migrants. These return migrants started or joined e-commerce business in their rural homes, thus brought about potentials not only to rural economies but also to rural societies. Due to the emergence of Taobao Villages, “Hollow villages” are no longer hollow and children are neglected no more. In addition, return migrants, who often possess higher skillset and broader horizons, are more prone to contribute to their rural societies. This emerging phenomenon suggests that return migration fostered by e-commerce might be a key factor to solve the existing problems in rural areas. Yet such broader social welfare eﬀects have hardly been analyzed up till now. The objective of this study is, therefore, to fill the research gap by analyzing return rural migration caused by e-commerce using panel data collected from farm households in China. In order to explain the reason how e-commerce effect rural migration, this paper is to construct a theoretical framework under the assumption of quasi perfect competitive market based on search theory of information economics. On this basis, we empirically analyze the impact of e-commerce adoption on farmers’ return migration decision and other economic outcomes using a propensity score matching with difference in difference (PSM-DID) approach. We also examine the difference in farmers’ attitudes towards participation in public affairs. For the purpose of robustness check, we also estimated our data using an endogenous switching regression (ESR) and an augmented inverse propensity weighted (AIPW) estimator. The data used in the econometric analysis were obtained from a survey of 1,030 farm households in three counties, respectively, from Jiangsu, Shandong and Zhejiang Provinces. These three counties are renowned for their rural e-commerce development and are widely considered as the most representative in China. We randomly picked up 26 Taobao villages and 25 control villages. Within each Taobao village, we randomly interviewed 10 households who are adopting e-commerce and another 10 households who are not e-commerce adopters. The dataset is composed of 405 e-commerce adopters and 616 non-adopters on a three-year basis, fitting for matching. The empirical results indicate that there exists a significant difference in the total migrant work time between e-commerce adopters and non-adopters. Basic PSM test shows that e-commerce has a significant effect on farmers’ decision to migrate back home. Households that operate online stores tend to go back to rural hometown for lower operation costs. E-commerce adopters in rural areas also exhibit a more positive attitude towards public affairs participation. Thus, we feel safe to say the preliminary results are in line with our hypothesis. We expect to analyses the causal effect of e-commerce on rural migration using other rigorous econometric tools.... [Show full abstract]
TypeConference Contribution - Unpublished (Conference Oral Presentation)
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