Nonlinear effects of the digital economy on urban-rural integration: a case study of the Yangtze River Economic Belt

Abstract

This study addresses the existing literature gap concerning the non-linear effects and operational mechanisms of impact of the digital economy (DE) on urban-rural integration (URI). To this purpose, panel data from 110 cities within the Yangtze River Economic Belt (YREB) are employed, spanning the period 2013–2022. Building upon the quantification of the DE and URI, this study employs the Panel Smooth Transition Regression (PSTR) model and the mediation effect model to examine the impact and of the DE on URI from a dynamic, non-linear perspective. The results showed that from 2013 to 2022, both the DE and URI in the YREB followed a consistent upward trend year on year, while regional disparities gradually narrowed. The DE showed increasing marginal effects across all dimensions of URI—economic, social, spatial, and social cohesion—exhibiting a nonlinear pattern. Moreover, it mitigated urban-rural resource misallocation to foster integrated development, with labor misallocation mitigation serving as the primary pathway. Furthermore, the role of the DE in alleviating capital misallocation remained less pronounced, compared to other mechanisms. These findings provide quantitative evidence and theoretical support for leveraging the DE to foster URI.