Social networks are cornerstones of personal trade in developing countries. However, it is costly to build and maintain social networks. The high cost imposes an entry barrier for people who lack social networks, such as those from outside local communities. E-commerce offers a way for them to circumvent this problem.
E-commerce offers a way for them to circumvent this problem. The timely payment of e-commerce reduces their reliance on network-based trade credit that is prevalent in traditional trades, easing their need for social networks. Using the administrative universe firm registry dataset in China, we show that the spread of e-commerce has enabled more people to become entrepreneurs.