Toward Common Prosperity: Spatially Heterogeneous Effects and Mechanisms of Digital Village Construction on the Urban–Rural Income Gap in Mountainous China

Mountainous regions are critical to promoting inclusive growth and reducing spatial inequality worldwide. Digital village construction offers a new pathway to overcome geographical constraints and reshape urban–rural income distribution in these areas. Using county-level data for 2020 and focusing on mountainous China, this study integrates the Theil index, IV-2SLS, MGWR, and mediation models to characterize the spatial pattern of the urban–rural income gap (URIG) and identify the spatially heterogeneous effects and potential mechanisms of digital village construction across different geomorphological settings. The results indicate that: (1) Large and highly dispersed URIG are concentrated in mountainous regions. On average, the gap is approximately twice as large as that in non-mountainous regions and varies markedly across geomorphological types. URIG is highest in mountain counties, shows the greatest variation in plateau counties, and tends to be lower in hill counties. (2) Digital village construction exerts a significant negative effect on URIG in mountainous China, with the effect being stronger than in non-mountainous regions and generally increasing in magnitude from east to west. (3) The effects of different DVI dimensions on URIG exhibit substantial spatial heterogeneity and vary in their spatial scales of influence. Rural economy digitalization shows widespread and consistently negative effects and emerges as the dominant dimension across most mountainous regions, while the effect of other dimensions is more localized, particularly rural life digitalization, which shows stronger negative effects in mountain counties, plateau counties, and underdeveloped mountainous counties. (4) Agricultural operation modernization and labor allocation optimization constitute potential channels underlying the association between digital village construction and a narrower URIG, with the estimated indirect effect being more pronounced through labor allocation optimization. These findings provide empirical evidence for advancing inclusive development in mountainous regions amid China’s common prosperity agenda, with broader implications for place-based digital village construction.