The Role of E-Commerce in Promoting Sustainable Local Employment in Rural Areas: Evidence from China

Abstract

Addressing the outflow of rural labor remains central to achieving inclusive and sustainable development in many emerging economies. This study investigates how rural e-commerce—encompassing both trade- and finance-oriented platforms—affects local employment dynamics. Drawing on panel data from 28 Chinese provinces between 2012 and 2020, we construct a composite index of rural e-commerce development and apply a two-way fixed-effects model to assess its impact on labor retention. Based on a nationwide regression analysis of Chinese survey data, we find that rural e-commerce significantly increases intra-county employment, with estimated effects robust across model specifications. Specifically, a one-unit increase in the e-commerce development index is associated with a 0.1 increase in the likelihood of local labor retention, significant at the 1% level. However, benefits are unevenly distributed: positive impacts are concentrated in eastern and central regions, while western provinces experience adverse effects, and northeastern areas show no significant change. These findings underscore the role of rural e-commerce as a driver of digital inclusion and local economic resilience, while also revealing structural barriers that hinder equitable access to its benefits. By identifying the enabling conditions, this study contributes to a more context-sensitive understanding of how platform economies can support spatially balanced and socially just rural development. Policies that promote rural e-commerce are thus likely to facilitate the local redeployment of rural labor.