E-commerce development and household portfolio decisions in rural China

We exploit the staggered rollout of China's Rural E-commerce Demonstration County (REDC) program as a quasi-natural experiment to examine its impact on household portfolio decisions. Our findings suggest that households in counties designated as REDC sites tend to have lower investment in risky assets, including the likelihood of holding them, the amounts invested, and their portfolio share, without affecting the total value of their financial assets. The key channels through which the REDC program influences rural households' investment decisions include labor market outcomes, financial market access, household consumption, public pension payment, and risk preference. The effects are more pronounced for households with less educated working-age adults, lower incomes, higher consumption needs, and more dependent family members, highlighting significant heterogeneity in responses to e-commerce expansion.