Abstract：The systematic and orderly promotion of new urbanization is becoming a key driver for high-quality economic development and regional coordination during the “14th Five-Year Plan” period and beyond. Adjustments in intergovernmental fiscal relations are expected to significantly impact economic relationships between regions. Using a multi-period dynamic Difference-in-Differences （DID） method， this study analyzes the effects of administrative restructuring， specifically the “City-county Merger Reform”， on inter-regional industrial connections. The research reveals that neighboring regions with a higher-level development in the tradable sector exhibit stronger economic interdependence， but the “City-county Merger Reform” induces a decline in industrial linkage between merged and neighboring counties. This shift is primarily attributed to the reform’s nature as an urbanization led by municipal governments， with merged counties implementing land policies favoring non-tradable sectors， while reducing land support policies for the tradable sector， thereby prompting merged counties to transition from tradable sector focused economies to non-tradable sector focused economies， resulting in a decrease in inter-regional industrial linkages. In light of these findings， it is suggested that prudently advancing the “City-county Merger Reform” and optimizing fiscal and administrative power reform plans help to facilitate the coordinated development of regional economies through high-quality urbanization.
2024, Vol. 23 
