Reducing the Consumption Gap Between Urban and Rural Areas: The Role of Rural Industrial Integration in China

Abstract

The development of rural industry integration (RII) is an important way to revitalize China’s rural industry and resolve problems linked to urban–rural imbalance. This paper introduces a framework for theoretical analysis and offers a new insight into the impact mechanism of RII on the consumption gap between urban and rural areas (CGUR) and its sub-dimensions. On the basis of interprovincial panel data from 2011 to 2022, via the panel regression method and spatial econometric and mediating effect models, we empirically investigate the effect of RII on the CGUR. The results show that the development of RII can directly reduce the CGUR and has an obvious spatial spillover effect. Further examination and mechanism analysis indicate that the role of RII in reducing the CGUR is greater in terms of development consumption and enjoyment consumption than in terms of subsistence consumption. Mediating effect analysis shows that RII exerts a negative effect on the CGUR by promoting increases in farmers’ income and rural consumption and driving regional industrial upgrading. The conclusions not only help clarify the relationship between RII and the CGUR but also lead to suggestions for promoting the sustainable development of the rural industry and realizing rural revitalization in China’s new development stage.