Can e-commerce narrow regional economic disparities? Evidence from national e-commerce demonstration cities policy in China

Addressing glaring regional economic disparities has long been a crucial challenge for China to tackle, and the burgeoning growth of e-commerce is poised to serve as a pivotal solution. This paper takes the policy of the National E-commerce Demonstration Cities (NEDC) as a quasi-natural experiment, base on the panel data covering 284 cities at prefecture level and above in China from 2005 to 2021, and adopt the staggered difference-in-differences (DID) model and mediation effect model to empirically investigate the impact and mechanism of e-commerce on regional economic disparities. The results show that, firstly, the policy of NECD has notably narrowed the regional economic disparities, which is still valid after rigorous robustness test. Secondly, the heterogeneity analysis results revealed that the effect of NEDC policy on narrowing regional economic disparities was more pronounced in central and western cities, larger-scale cities, resource-based cities, and convenient transportation cities. Thirdly, the mechanism analysis results indicate that the policy of NEDC narrow regional economic disparities by optimizing resource allocation, promoting market integration, and facilitating technology diffusion. This study provides valuable insights into the role of e-commerce in bridging regional economic disparities, emphasize the practical significance of the construction of digital economy represented by e-commerce, and offers actionable policy references for achieving the coordinated development of regional economies and fostering high-quality e-commerce growth in this new era.