Industrial digitalization and urban-rural income gap: An empirical analysis based on data from 30 provinces in China

Yi Wang, Xinyao Wang, Huijie Zhou, Xiaohan Chen and Xiaoyan Mao

Economic Analysis and Policy, 2025, vol. 87, issue C, 2023-2042

Abstract: Based on the panel data of 30 provincial regions in China from 2011 to 2022, this paper first constructs an evaluation index system of industrial digitalization by using the entropy method, then systematically analyzes the impact mechanism of industrial digitalization on the urban-rural income gap by applying a multi-dimensional econometric model, and finally deeply explores the influence of industrial digitalization on the urban-rural income gap and its underlying mechanism. The empirical results show that the development of industrial digitalization has significantly narrowed the urban-rural income gap, and its effect presented a regional heterogeneity characteristic of "central province regions> western province regions> eastern province regions." Innovation level, as a key mediating variable, generates a masking effect in the transmission process, and the result shows that industrial digitization has improved innovation level, indirectly widening the urban-rural gap by 3.1%. The moderation effect of industrial agglomeration exhibits dual characteristics, strengthening the direct poverty reduction effect of industrial digitization and weakening the negative impact of innovation level through intermediary pathways. Further analysis reveals the heterogeneity generation mechanism through spatial agglomeration-spillover effects. This research reveals the complex mechanism of urban-rural coordinated development in the era of the digital economy and proposes implementing differentiated regional digital strategies, constructing a three-dimensional policy system for urban-rural coordinated development consisting of infrastructure construction, innovation achievement transformation, and industrial chain collaboration, and promoting common prosperity through optimizing the digital dividend distribution mechanism.

Keywords: Industrial digitalization; Urban-rural income gap; Industrial agglomeration; Regional heterogeneity; Masking effect (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:87:y:2025:i:c:p:2023-2042

DOI: 10.1016/j.eap.2025.08.001

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