Synergistic Effects of the Digital Economy on Common Prosperity in Rural China

Abstract

Under the strategic backdrop of rural revitalization, the digital economy has emerged as a pivotal engine for rural development in China. However, systematic research remains scarce on the ways in which synergistic effects of different emerging digital economic sectors influence rural income growth and distributional equality. This study focuses on the synergistic interaction between e-commerce and digital finance and examines their combined impact on rural income growth and distribution. Leveraging data from the E-commerce Demonstration Projects in Rural Areas and the Digital Inclusive Finance Index, our findings reveal: (1) synergistic effects significantly enhance farmers’ income while reducing inequality metrics including the Gini coefficient and inter-quantile income gaps; (2) synergistic effects exhibit dynamic inclusivity, demonstrating more pronounced income-boosting effects in low-income counties (e.g. labor-intensive regions and financially underdeveloped areas); and (3) micro-mechanism analysis indicates that this synergy operates by stimulating local employment, simultaneously elevating wage-based and entrepreneurial incomes and narrowing disparities in entrepreneurial income. This research provides critical policy insights in terms of leveraging the digital economy in order to advance rural revitalization and prosperity.