Bridging or widening? The impact of the Broadband China policy on urban-rural income inequality

As a national strategy, the Broadband China (BC) policy aims to facilitate the rapid development of Internet infrastructure, particularly in rural areas. Utilizing data from 245 Chinese cities from 2011 to 2021, this study employed the multi-period difference in difference (DID) approach to investigate the influence of BC policy on the urban-rural income gap. The findings indicated that the BC policy has widened the income gap, which is also robust after several tests. As a result of location-specific conditions, there is regional heterogeneity in this effect. Meanwhile, innovation, entrepreneurship, digital inclusive finance, and information industry development are essential mechanisms through which BC policy influences the income gap. Furthermore, some other policies have effectively mitigated the widening impact. In the end, this paper suggests that policy implementation should consider the level of local development and the synergistic impact of implementing multiple policies.