Can Rural Industrial Convergence Alleviate Urban–Rural Income Inequality?: Empirical Evidence from China

Abstract

In many countries, the urban–rural income inequality affects healthy and sustainable economic development and is a pressing issue that requires immediate attention. As a new industrial development model, rural industrial convergence can provide new ideas and impetus for alleviating the urban–rural income inequality. This study, drawing on provincial panel data from China spanning 2010 to 2022, used the entropy method and Theil index to measure the rural industrial convergence and the urban–rural income inequality, respectively, and empirically tested the effect and mechanism of rural industrial convergence on the urban–rural income inequality. The results showed the following: (1) Rural industrial convergence had a notable impact on alleviating the urban–rural income inequality. (2) Rural industrial convergence could help reduce the urban–rural income inequality by increasing the scale of land operation. (3) The government attention to green development could positively moderate the impact of rural industrial convergence on the urban–rural income inequality; the deeper the government attention to green development, the greater the role rural industrial convergence played in alleviating the urban–rural income inequality. (4) There was a threshold effect in the alleviating effect of rural industrial convergence on the urban–rural income inequality, which was gradually strengthened when the growth of the digital economy and the enhancement of the business environment were beyond the threshold point. (5) Rural industrial convergence also had significant spatial spillover effects on adjacent regions. Overall, the findings of this study enrich the research on the impact of rural industrial convergence on the urban–rural income inequality and provide insights for other similar countries.