Abstract This article investigates the effects that online retail puts on the economic gap in our country. On the basis of using statistical index, such as Coefficient of Variation and Theil Index, to for measuring regional differences of the Internet retail, we disclose the mechanism of online retail affecting regional differences. After that, we use national and provincial civic data (2013-2015) to conduct empirical test. Research results suggest: (1) Provincial difference in the eastern area is the biggest, and the next is the western area, the minimum is the middle area. Regional disparity is the main cause of regional online retail differences. (2) The mechanism of online retail affecting economic difference between districts rests on the technology spillover effect of the e-business firms, the direct pull effect of online consumption on economic growth, the indirect pull effect that generates from online consumption driving investment and labor force employment, and the leakage effect caused by consumption outlet. (3) The absolute convergence in the whole country and western area does exist. In view of online retail, the conditional convergence coefficient of national country and western areas is negative significantly and that of the provinces in middle area seem to be divergent. Online retail weakens the economic convergence of the whole country and enhances the divergence effect of the middle area. Meanwhile, it also weakens the convergence effect in the eastern and western areas.
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