Do farmers gain internet dividends from E-commerce adoption? Evidence from China

•Survey data from 1030 smallholder farmers from 51 villages are used for the study.•E-commerce adopters earn significantly higher income than non-adopters.•There is considerable heterogeneity in the effect of e-commerce adoption on income.•Sales income and property income are the contributors to the overall income gain.•E-commerce adoption has a significant and negative impact on wage income. This study examines the effects of e-commerce adoption on household income, using survey data of 1,030 households in China. The combination of propensity score matching and difference-in-difference method is employed to address the sample selection bias associated with e-commerce adoption. The results show that e-commerce adopters obtain significantly higher income than non-adopters, and such a significant and large income gain is mainly contributed by the significant increase in sales income. E-commerce adoption has a significant and negative impact on wage income due to the labor substitution effect, while it affects transfer income insignificantly. Additional analysis reveals that the income effects of e-commerce adoption are heterogeneous across geographic locations and household-level characteristics.