Impacts of agri-food e-commerce on traditional wholesale industry: Evidence from China

Abstract

Rapidly expanding study investigates the effects of e-commerce on retail market company operations. However, the interaction between agri-food e-commerce (AEC) and the traditional agri-food wholesale industry (AWI) has not received enough attention in the existing literature. Based on the provincial panel data from 2013 to 2020 in China, this paper examines the effect of agri-food e-commerce (AEC), which includes three dimensions: digitalization (DIGITAL), agri-food e-commerce infrastructure and support (AECI), and e-economy (AECE), on the traditional wholesale industry (AWI). First, both AWI and AEC are measured using an entropy-based combination of indicators, and the results indicate that for China as a whole, AWI has remained practically unchanged during the period, whereas AEC exhibits a significant rising trend. The findings of the fixed-effect regression reveal that DIGITAL and AECE tend to raise AWI, whereas AECI has a negative effect on AWI. Thirdly, threshold regression results indicate that AECI tends to diminish AWI with three-stage inhibitory intensity, which manifests as a first increase and then a drop in the inhibition degree. These results suggest that with the introduction of e-commerce for agricultural product circulation, there will be catfish effects of digital development that tend to stimulate the vitality of the conventional wholesale industry and promote technical progress. Furthermore, the traditional wholesale industry benefits financially from e-commerce even while it diverts part of the flow of the traditional wholesale circulation for agricultural products.

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