Research on Differences of the Impact of Internet Development on Consumption of Urban and Rural Residents in China

Abstract

Based on China’s provincial panel data from 2003 to 2016, empirical analysis was made on the relationship between Internet development and urban-rural residents’ consumption growth. The results show that the Internet on the whole significantly affected the consumption of urban and rural residents, and the impact on the per capita consumption of urban residents is greater than that of rural residents. And the impact on the east is more than that of the Mid-west. In the regional differences, the impact of Internet on the consumption of urban and rural residents in the east is not significant, but the impact of Internet in the Mid-west on the consumption of urban residents is significantly greater than that of rural residents. Among them, mobile phone penetration rate has a significant impact on the consumption in rural areas, especially in the Mid-west of the country, but the impact difference is relatively small, which may be an important tool for the rural residents in the Mid-west to make up the difference between urban and rural residents. Therefore, it is necessary to strengthen the construction of rural Internet infrastructure in the Mid-west, further improve the urbanization, market circulation and social security system, raise rural incomes, and promote residents’ consumption and economic growth in the Mid-west region.