Research on the Common Prosperity Effect of Integrated Regional Expansion: An Empirical Study Based on the Yangtze River Delta

Addressing the urban–rural income disparity and fostering coordinated urban–rural development pose critical challenges for China in pursuit of its common prosperity strategy during its new phase of development. Regional integration emerges as a pivotal policy tool, which is extensively utilized to facilitate regional development coordination and significantly contributing to overall regional economic growth. This study delves into whether the implementation of regional integration policies generates a common prosperity effect, thereby reducing the disparity in income levels between urban and rural regions. Utilizing city-level panel data spanning from 2000 to 2019 within the Yangtze River Delta region, we treat the expansion of regional integration as a quasi-natural experiment and employ a time-varying Difference-in-Differences model to identify the integration’s common prosperity effect. Furthermore, we leverage mediation effect models to unravel the mechanisms through which integration influences the urban–rural divide in income. Our findings reveal that the expansion of integrated regions contributes to narrowing the urban–rural income gap with these results remaining robust across multiple tests. Urbanization and marketization are pivotal mechanisms driving the reduction in the urban–rural income disparity in integrated regions. Additionally, heterogeneity analysis uncovers significant spatial and temporal variations in the urban–rural income gap narrowing effect of integration expansion. Specifically, over time, the effect transitions from a significant negative impact to an insignificant positive one, while spatially, significant negative effects are observed in Jiangsu and Zhejiang provinces, contrasting with insignificant positive effects in Anhui province. This study offers fresh perspectives on the nexus between regional integration and the urban–rural income disparity, laying a scientific groundwork to evaluate the impacts of urban agglomeration integration and optimize policies aimed at fostering regional integration and coordinated urban–rural development.