Does polycentric development narrow intra-urban income inequality? An empirical examination based on mediation and threshold effects

Using corrected nighttime light data and LandScan population data from 2003 to 2019, this study measures urban spatial structure and intra-urban income inequality in Chinese cities. Employing instrumental variable estimation, mediation analysis, and panel threshold models, we reveal a robust U-shaped relationship between polycentricity and income inequality. In most cities, a “divided but not scattered” polycentric pattern helps to narrow income gaps. Mechanistic analysis shows that labor mobility, capital mobility, and borrowed functions alleviate inequality, while performance borrowing may worsen it. The income-equalizing effect of polycentric development is more pronounced in high-density cities and is shaped by industrial upgrading, spatial distance between centers, and the intensity of urban planning. These findings suggest that polycentric development can mitigate inequality when it is aligned with broader urban dynamics and governance capacity.