PurposeAs an important public infrastructure, broadband has absorbed a large amount of investment in China. However, how and to what extent these investments affect economic and social development is largely unknown. The purpose of this paper is to analyze the impact of broadband infrastructure construction on consumption of rural households, using an exogenous policy shock introduced by the China's “Broadband Countryside” pilot project.Design/methodology/approachUsing the tracking sample data of China Household Financial Survey in 2013 and 2015, this study estimates the effect of broadband construction on rural household consumption and draws causality between them relying on a quasi-natural experiment based on an exogenous policy shock.FindingsThe difference-in-difference estimates show that broadband construction has significantly increased rural household consumption by 16.69%. This positive promotion effect is mainly achieved through mobile phone access to the Internet, while penetration of computer crowds out rural household consumption. Further research find that broadband construction has increased rural household consumption related to daily life and high-quality household consumption, but not statistically significant for the latter, and it has not helped to promote the consumption upgrading of rural households.Originality/valueThis study contributes to the understanding of the positive status of broadband infrastructure in economic and social development by analyzing the impact of broadband infrastructure construction on rural household consumption. This study expands the content of consumption to rural households, especially high-quality consumption and consumption upgrading in rural areas, which provides the possibility to further tap the consumption potential of rural market. The study is the first to explore how broadband infrastructure construction affects consumption of rural households using a quasi-natural experiment.

Internet infrastructure, like other infrastructures, is gradually becoming an important force affecting economic and social development, laying the foundation for the development of the digital economy. Based on a quasi-natural experiment, combined with the data of 201 Chinese prefectures from 2010 to 2018, this study constructs a difference-in-differences approach to examine the impact of internet infrastructure construction (IIC) on the urban–rural income gap. The main results show that IIC has a significant widening effect on the urban–rural income gap. Our study also finds that the effect has significant location and city attribute heterogeneity. Specifically, the IIC widens the urban–rural income gap more strongly in central-western, inland, provincial capital and small-scale cities. Furthermore, the promotion of IIC to the income of urban residents far exceeds that of rural residents, which is a typical manifestation of the third-level digital divide. However, increasing the education level of residents is beneficial to alleviating the widening effect of IIC on the urban–rural income gap. Overall, national policymakers should pay attention to the possible inequalities in promoting the development of national broadband internet. Policies for improving the digital application abilities of residents, especially vulnerable groups, are highly recommended to share the digital dividend.