Abstract
Regional inequalities are prevalent in all major economies. What are the effects of inclusive growth policies targeting economically disadvantaged regions? In this study, we examine how the East-West Poverty Alleviation Partnership, which pairs rich cities in East China with economically disadvantaged cities in West China, affects e-commerce trade. Using proprietary trade-flow data from Alibaba, we find that the partnership boosts e-commerce trade between partnered cities. This effect is asymmetric as it increases exports from West China to East China but not the other way around. The effect is also particularly strong for product categories in which West China has a comparative advantage and for the western regions with the largest economic and development disparities. Additionally, the results indicate that the partnership benefits both big and small sellers equally. In exploring the underlying mechanisms, we find that partnership-driven migration as well as consumer awareness can partially explain the effect.
https://pubsonline.informs.org/doi/10.1287/mksc.2023.0214
