Agricultural Eco-Efficiency and the Urban-Rural Income Gap in China: Mechanisms, Thresholds, and Spatial Spillovers

In the context of global advocacy of sustainable agriculture and urban-rural coordinated development, it is important to explore the socio-economic effects of agricultural eco-efficiency. In this study, we aim to empirically examine the impact of agricultural eco-efficiency (AEE) on the urban-rural income gap (URIG) and its mechanisms in China in order to provide policy recommendations for promoting the coordinated development of environmental sustainability and social equity. Based on Chinese provincial panel data from 2011 to 2024, a two-way fixed-effects model was employed. Robustness was tested through winsorization and variable replacement, and the lag of AEE was used as a variable to address endogenous problems. Furthermore, the adjustment effect model, the panel threshold model, and group regression were used to analyse the regulatory effect of financial support, threshold effect of urbanization levels, and heterogeneity across regions, technologies, and infrastructure. The research results show the following: (1) Improvement in AEE is significantly associated with a narrowing of the URIG, and this conclusion remains true under multiple tests. (2) Financial support plays a significant positive moderating role. (3) The impact of AEE has a double threshold effect based on the urbanization level, which is only significant in the range of medium urbanization level. (4) The effect is more obvious in the main grain-producing areas, areas with a high agricultural mechanization level, and areas with a high transportation infrastructure level. (5) AEE helps narrow the URIG in the target and neighbouring areas. Improving the ecological efficiency of agriculture has both environmental and income distribution benefits. Policy formulation should focus on strengthening the precise orientation of financial support and implementing differentiated strategies according to the urbanization stage, regional functional positioning, and technical foundation, so as to maximise its effectiveness in reducing poverty, increasing income, and promoting urban and rural equity.