Effect of Artificial Intelligence on the Development of China’s Wholesale and Retail Trade

Abstract

The rapid development of digital technologies and massive data analytics has enabled artificial intelligence (AI), via “machine learning”, to impact many societal sectors, including the wholesale and retail trade (WRT). However, the specific impact pathway and dynamics are still unclear. Based on the panel data of 30 provinces in China from 2015 to 2021, this paper employed the “VHSD-EM” model, random forest algorithm, and partial effect analysis to build an evaluation index system of AI and WRT, then to study the impact of AI on WRT in the temporal and spatial dimensions. Our main discoveries were as follows: (1) the quality of the WRT aligned well with the relative level of AI in the provinces, although the latter developed at a relatively fast pace; (2) the shortcomings that hindered the quality of WRT development varied in different regions, with a stark mismatch between the degree of informatization and the level of economic development in the eastern coastal region, a lack of innovation in the relatively high economic presence of the northern provinces, and a weak sharing of resources in the western region; (3) AI enhanced WRT development jointly with other key factors, particularly the density of employment, the percentage of WRT employees, and the ratio of the year-end financial institution deposits to the regional GDP, which raises the importance of the transaction volume of the technology market; (4) spatial differences exist in the impact pathways of AI on the high-quality development of WRT, and, for most provinces and regions except Shanghai and Guangdong, there is still significant room for expansion in the utilization of AI in WRT.