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Digital Industrial Agglomeration and Regional Market Integration: Evidence from Chinese Listed Firms

Year: 2026

Type: article

Abstract: Digital industrial agglomeration (DIA) is reshaping regional economic connections, yet its relationship with market segmentation remains insufficiently understood. Using 15,793 firm-year observations of Chinese listed digital enterprises from 2012 to 2021, this study examines the relationship between DIA and regional market integration. Regression results’ effects reveal a significant negative association between DIA and market segmentation. This finding remains robust across alternative measurements, sample adjustments, model specifications, and supplementary instrumental-variable analyses. Mediation analyses provide evidence consistent with two potential channels: enhanced data-factor mobility and improved firm information transparency. Heterogeneity analyses indicate that the negative association is more pronounced in eastern China, regions with stronger innovation capacity, and labor-intensive firms. Furthermore, regional economic development and openness strengthen this relationship. These findings extend the understanding of digital industrial agglomeration beyond conventional economic outcomes by highlighting its relevance to regional market integration. The study offers policy insights into reducing cross-regional market frictions through improved data circulation, information transparency, and coordinated digital industrial development.

Source: Urban Science

DOI: 10.3390/urbansci10110641

Authors: Siwen Wang, Huiru Ma, Xiangyi Chen

Institutions: Lanzhou University of Finance and Economics, Shandong University

Language: English

Topic: Agglomeration and Urban Systems

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,930