Impacts of agri-food e-commerce on traditional wholesale industry: Evidence from China

Rapidly expanding studies investigate the effects of e-commerce on company operations in the retail market. However, the interaction between agri-food e-commerce (AEC) and the traditional agri-food wholesale industry (AWI) has not received enough attention in the existing literature. Based on the provincial panel data from 2013 to 2020 in China, this paper examines the effect of AEC on AWI, comprising three dimensions: digitalization (DIGITAL), agri-food e-commerce infrastructure and supporting services (AECI), and agri-food e-commerce economy (AECE). First, AWI and AEC are measured using an entropy-based combination of indicators. The results indicate that for China as a whole, AWI has remained practically unchanged, whereas AEC exhibits a significant rising trend. Second, the findings of the fixed-effect regression reveal that DIGITAL and AECE tend to raise AWI, whereas AECI negatively affects AWI. Third, threshold regression results indicate that AECI tends to diminish AWI with three-stage inhibitory intensity, which manifests as a first increase and then a drop in the inhibition degree. These results suggest that with the introduction of e-commerce for agricultural product circulation, digital development will have catfish effects that tend to stimulate the vitality of the conventional wholesale industry and promote technical progress. Furthermore, the traditional wholesale industry benefits financially from e-commerce even while it diverts part of the traditional wholesale circulation for agricultural products.