Does the Mode of Rural Industrial Integration Matter? Empirical Evidence From Rural Household Livelihoods

ABSTRACT The Chinese Rural Industrial Integration (RII) program, which integrates land consolidation with industrial development, aims to enhance rural household incomes. Employing a quasi‐experimental design and a propensity score matching–difference‐in‐differences (PSM–DID) model, this study examines the effects of two RII modes on the livelihood outcomes of participating households in China. Mode I is primarily driven by enterprises or cooperatives, while Mode II is led by agricultural enterprises with cooperatives acting as intermediaries. The findings reveal that (1) RII significantly and positively impacts participants’ total income per capita but unexpectedly reduces life satisfaction. While agricultural income declines sharply, this effect is offset by increases in property and transfer incomes, and operating income shows a notable rise. (2) Mode I and II significantly reduce agricultural and transfer incomes but substantially boost operating and property incomes. (3) The effects of RII on household income and life satisfaction exhibit heterogeneity, influenced by factors such as land scale, life stage, and intergenerational dynamics. These results underscore the need to tailor RII implementation strategies to align with household capital endowments.