The Influence Mechanism and Spatial Spillover Effect of Digital Economy on Urban-Rural Integrated Development: An Empirical Analysis based on Provincial Panel Data

Abstract

The unbalanced urban-rural development remains a key bottleneck restricting China’s realization of common prosperity, while the vigorous development of the digital economy provides new momentum for reshaping urban-rural relations. Based on panel data covering 30 provincial-level administrative regions in China from 2012 to 2025, this paper constructs a digital economy development index and a comprehensive index of urban-rural integrated development. Adopting the two-way fixed effects model, mediating effect model and Spatial Durbin Model, it systematically investigates the direct impact, transmission mechanism and spatial spillover effect of the digital economy on urban-rural integrated development. The results show that the digital economy exerts a significant positive direct effect on urban-rural integrated development (coefficient = 0.173, significant at the 1% level). Green innovation and optimized capital allocation act as two vital transmission channels, whose mediating effects account for 35.1% and 37.6% of the total effect respectively. Such promoting effect is more prominent in eastern regions, as well as regions with high infrastructure availability and abundant human capital. Furthermore, the digital economy generates significant positive spatial spillover effects, which account for 71.7% of the total effect. This research offers new theoretical perspectives and empirical evidence for understanding the evolution of urban-rural relations in the digital economy era.