Can digitalized tools help stimulate the domestic economy? Evidence from the effects of digital coupons on merchant operation

By analyzing high-frequency data of mobile platform transactions in a large Chinese city, this paper explores the effects of digital coupons on catering and retailing businesses. The results show that digital coupons could generate positive and sustainable effects on the turnover and total sales of local catering and retailing businesses. These positive effects are found for catering and retailing businesses of all sizes, especially large merchants. In addition, while digital coupons are effective in boosting the consumption of commodities such as food and cell phones, they do not crowd out spending on other categories.