Has the Growth of the Platform Economy Narrowed the Urban–Rural Income Gap? Implications for Sustainable Development and Common Prosperity in China

Abstract

Under the ‘new normal’ of economic growth, the platform economy has expanded rapidly, creating entrepreneurial and employment opportunities while exerting novel influences on the urban–rural income gap. Using balanced panel data from 288 Chinese prefecture-level cities (2010–2024), this paper treats the “National E-commerce Demonstration City” policy as an exogenous shock and applies a multi-period staggered difference-in-differences model. The results show that policy-induced platform economy development significantly widens the urban–rural income gap due to the digital divide, a conclusion robust to various checks. Mechanism analysis supports three channels: entrepreneurial activity, labor agglomeration, and digital infrastructure construction, all with net transmission effects. The widening effect is larger in cities with greater scale and lower digital inclusive finance levels, while the rural land transfer result is only preliminary. Further analysis indicates that a well-established institutional environment and high market potential can mitigate the widening effect. This paper provides empirical evidence and policy implications for regulating the platform economy to optimize income distribution and promote sustainable urban–rural integration.