Research on the Impact and Mechanism of Modernized Industry-City Integration on the Size of the Local Market

The enhancement of local market size is an important element of sustainable economic development. The core purpose of the article is to prove that the increase of local market size has the attribute of industrial and spatial coupling, and that the deep integration of modernized industry-city has a profound impact on the increase of local market size. Based on panel data from 30 provinces in China from 2007 to 2021, this article employs a two-way fixed effects model to empirically test the impact of the deep integration of modernized industrial systems and new urbanization on the local market size. Furthermore, it uses industrial agglomeration, industrial structure upgrading, and urban-rural income gap as mediating variables to explore the mechanism. The results indicate that the deep integration of modernized industrial systems and new urbanization has a significant promoting effect on the local market size, with regional heterogeneity. The mediating effect test shows that the impact of the deep integration of modernized industrial systems and new urbanization on the local market size mainly operates through industrial agglomeration, industrial structure upgrading, and urban-rural integration.