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Rural e-commerce has developed rapidly in China, but it has presented big regional differences. This paper aims to empirically examine what determines the development of rural e-commerce in China. It is further hoped to contribute to reduce the gap of regional differences in e-commerce development and prompt the e-commerce development in underdeveloped areas. The emerging and rapid growth of Taobao Villages is a typical example of rural e-commerce development. We therefore focus on exploring the major driving forces of emerging Taobao Villages in China. The data used in this study are generated through Geography Information System with location of each Taobao Village and data mining with web crawler, which includes the data for a total sample of 2018 Taobao Villages over 2013-2017. The random-effect probit and bivariate probit models with robust standard errors and clustering standard errors are estimated. The results show that the economic condition of a village and its surrounding areas and the distances to national way and highway impact the development of rural e-commerce at different extents. The area with developed e-commerce promotes rural e-commerce development of the nearby areas, which reflects there are spillover effects on developing rural e-commerce. The paper concludes with several policy implications. Acknowledgement : Funding for this research was supported by a grant from the Asian Development Bank (2017X127.CCA). The authors would like to thank the colleagues who helped to collect data. They are Dr. Shi Shu, Yueying Bai, Xiya Zhao, Yaqi Hu and Yuling Li. We are also grateful to Dr. Hongdong Guo, Dr. Qihui Chen, Dr. Shi Min and Jiaqi Qi for their useful suggestions to improve the quality of this paper.
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