The impact of cooperative development on the urban-rural income gap: empirical evidence from China

Narrowing the income gap between urban and rural areas is a core issue in promoting rural revitalization. As a new type of business entity in rural areas, the development of cooperatives is closely related to the urban-rural income distribution pattern. Based on a theoretical framework analyzing the impact of cooperative development on the urban-rural income gap (URIG), this study conducts an empirical investigation using provincial panel data from 2006 to 2023. The application of fixed-effects, mediation, threshold, and spatial Durbin models indicates that cooperative development substantially reduces the URIG, with notable geographical variation, with impacts more pronounced in the central and western regions and major grain-producing areas. Additionally, a threshold effect is observed in the influence of the village cooperative’s expanded reproduction expenditures on the URIG, indicating nonlinear impacts. The study also identifies significant spatial spillover effects, wherein the development of cooperative development in one region positively affects the URIG in neighboring provinces. Based on these findings, the study proposes countermeasures and suggestions, including strengthening the intermediary role of cooperatives, implementing differentiated development strategies, increasing investment in expanded reproduction, and building a regional collaborative development mechanism.