Does Internet development affect urban-rural income gap in China? An empirical investigation at provincial level

Abstract

This study aims to examine the impact of Internet development on the urban-rural income gap in China. By using a provincial level panel dataset comprising 31 of China’s provinces, it analyzes and compares the effects of the eastern, central, and western regions over the period of 2005–2016. The results show that Internet development aggravates the gap in the central region much more than that in the eastern and western regions. The trade openness expands the urban-rural income gap only in the eastern region. Urbanization reduces the urban-rural income gap in the western region more than that in the eastern and central regions. Additionally, the regional economic development level also reduces the urban-rural income gap in central region more than that in the eastern region. FDI reduces the urban-rural income gap only in the central region. Additionally, while the urban-rural income gap can widen further by Internet development with trade openness, it can be decreased if Internet development is combined with FDI and urbanization. To reduce urban-rural income gap, the government should accelerate the construction of Internet according to regional differences.

Spatial Spillover Effect and Threshold Effect of Digital Financial Inclusion on Farmers’ Income Growth—Based on Provincial Data of China

“…The income gap between urban and rural areas of China has become one of the critical issues concerned by many scholars. There are many factors affecting farmers' income, such as natural conditions [1], infrastructure gap [2,3], urbanization level, and even capital stock difference [4,5], which may influence farmers' income to a certain extent. From the perspective of financial development, since the traditional financial mode (set physical outlets, etc.)…”

How Does Internet Infrastructure Construction Affect the Urban–Rural Income Gap? Evidence from a Quasi-Natural Experiment in China

“…This article is related to previous studies, especially two recent studies (Li et al, 2021; Wang et al, 2021), but diverges from them in three ways.…”

“…Among them, endogenous factors related to economic growth include educational development (Golley and Kong, 2013), industrial structure and financial development level (Zhang et al, 2012). Exogenous factors mainly refer to government policy as well as geographic factors, including fiscal expenditure (Long et al, 2009), foreign direct investment (Wang et al, 2021), biases in government policies (Li et al, 2014) and topography (Sicular et al, 2007). In addition, the internet has also been of concern to a few scholars in explaining the urban–rural income gap, but, at present, they have not reached a consensus (Chang and Just, 2009).…”

Research on the Effect of Digital Economy Development on Local Financial Pressure

“…In addition, academic research on the measurement system (Mesenbourg ,2001;Bukht and Heeks, 2018;Barefoot et al, 2018) and the impact effect (Popkova and Gulzat, 2019;Bulturbayevich and Jurayevich, 2020;Abdurakhmanova et al, 2020) of the digital economy is also flourishing. It is generally believed that the development of the digital economy can effectively promote the upgrading of industrial structure (Su et al, 2021), improve innovation efficiency (Sultana et al, 2021;Pan et al, 2022) and narrow the gap between urban and rural areas (Wang et al, 2021;Braesemann et al, 2022). In the research on the fiscal and tax effects of digital economy development, the existing literature mainly focuses on the impact of the digital economy on local government tax revenue (Akdogan, 2021; and fiscal sustainability, which indirectly indicates the impact of digital economy development on local fiscal pressure.…”