Environmental effects of rural e-commerce: A case study of chemical fertilizer reduction in China

The economic effects of rural e-commerce have been fully discussed by scholars, but few studies focus on the environmental effects of rural e-commerce. This study takes the reduced application of chemical fertilizer in China as an example. On the basis of constructing the corresponding theoretical framework, we take the promotion of Rural E-Commerce Demonstration County (REDC) policy as a quasi-natural experiment, using the county panel data from 2000 to 2020 and the multi-period difference-in-difference method to excavate the influence of rural e-commerce on the fertilizer reduction. Our results show that REDC policy reduces the amount of chemical fertilizer applied in the county by 21%, which is unexpected. Our findings passed a series of robustness tests, including dealing with selective bias, eliminating other policy interference in the same period and placebo test. Based on the heterogeneity analysis of grain production and marketing regions and informatization level, it is found that the effect of fertilizer reduction by rural e-commerce is more impressive in the major grain production areas and counties with low informatization level. According to the theoretical framework, we use the mediating effect model to verify the transmission mechanism of marginal income improvement, mechanization and labor transfer. Therefore, we believe that policy designers can use e-commerce to promote farmers to adopt the production strategies of reducing fertilizer application. The findings and recommendations of this study may be relevant to other countries with free trading markets and e-commerce platforms.