Digital Economy and Urban–Rural Integration: Threshold Effects and Regional Heterogeneity in China

Persistent urban–rural disparities remain a major challenge to inclusive and sustainable development in many developing economies. The digital economy is widely viewed as a potential mechanism for alleviating such inequalities, yet empirical evidence for its effectiveness across heterogeneous regional conditions remains limited. Using panel data from 30 Chinese provinces over the period 2013–2022, this study constructs composite indices of digital economy development and urban–rural integration based on the entropy weight method. Fixed-effects models, panel threshold regressions, and moderation analyses are employed to examine average and nonlinear effects, while instrumental variable approaches, including a Bartik-type instrument, are used to address potential endogeneity. The results indicate that the digital economy significantly promotes urban–rural integration, but the effect is highly conditional rather than uniform. Specifically, the positive impact becomes substantially stronger only after rationalization of industrial structure and education levels exceed critical threshold values. Government support and financial development further amplify this effect, and pronounced regional heterogeneity is observed, with stronger effects in eastern regions and clear late-mover advantages in western regions. These findings highlight the conditions under which digital transformation can effectively support inclusive urban–rural integration and offer policy-relevant insights for developing economies.