Does the cross-border e-commerce comprehensive pilot zones policy affect the urban-rural income gap in China?

With the development of Internet technology and modern supply chains, cross-border e-commerce (CBEC) has become one of the most important forms of international trade. The impact of this new mode of trade on economic growth and income disparity is worthy of further examination. This study treats the CBEC pilot zone policy as a quasi-natural experiment, using the difference-in-differences approach to examine its impact on the urban-rural income gap. The findings showed that: (1) This policy significantly widened the urban-rural income gap; (2) innovation, entrepreneurship, and export are important paths toward expanding the impact of the CBEC pilot policy on the income gap, but the digital environment suppresses these expanding paths; and (3) the impact of this policy on the income gap shows distinct regional heterogeneity. This study provides several recommendations on how to promote balanced incomes.