The impact of e-commerce activities on rural household leverage

ABSTRACT

This article provides new evidence on the connection between e-commerce and rural household leverage in China. We find that e-commerce activities increase the leverage ratio of Chinese rural households significantly, especially in the west region, households headed by men, and households that have not experienced borrowing denials. The results are still robust when using an instrumental variable approach to solve endogenous problems. The findings suggest that participation in e-commerce may relieve the constraint of formal credit, which will boost the household leverage.

KEYWORDS:

• E-commerce
• rural families
• household leverage
• credit constraint

JEL CLASSIFICATION:

• Q12
• O18

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ As this topic is related to the family financial situation, we regard the main financial respondent as the head of the household.

Additional information

Funding

This work was supported by the National Social Science Foundation of China [19BGL256].