Can the E-commercialization improve residents’ income? --Evidence from “Taobao Counties” in China

From the perspective of the e-commercialization of a county economy, this paper investigates how industrial clusters represented by “Taobao Villages/Towns” affect residents' per capita income. Applying the difference-in-difference (DID) and propensity score matching (PSM) methods, we show that urban residents' per capita disposable income in Taobao Counties is, on average, approximately RMB 2680 higher than that of non-Taobao Counties, significant at the 95% level. However, e-commercialization has only a slight or nonsignificant effect on rural residents’ per capita income. We propose mechanisms for this stylized effect and discuss corresponding policy implications.