Digital Economy, Fiscal–Tax Governance and Sustainable Inter-Provincial Market Integration for Balanced Regional Development

Persistent inter-provincial market segmentation restrains China’s long-term sustainable domestic circulation and balanced regional development, which conflicts with the country’s SDG-aligned coordinated growth goals. Digital transformation cuts cross-border transaction frictions, while targeted fiscal and tax tools adjust local development incentives to realize sustained, inclusive market integration. Drawing on balanced panel data of 30 Chinese provinces from 2009 to 2024, this paper constructs two multi-dimensional composite indices via entropy weighting. We build a trade-flow theoretical framework embedded with fiscal incentive parameters, then design benchmark, dual mediation, and interaction-moderating panel models. System GMM and lagged variable regressions mitigate endogeneity risks, and a full suite of robustness tests validates the reliability of empirical outputs. The results show digital expansion significantly alleviates market fragmentation and fuels sustainable unified market construction. Information transparency improvement and transportation cost reduction serve as two parallel sustainable transmission paths. Obvious regional differentiation exists in inland provinces with underdeveloped market systems, which harvest larger balanced development dividends from digital upgrades. Fiscal and tax policies exert significant positive moderating effects; standardized fiscal allocation can amplify digitalization’s capacity to deliver long-term coordinated regional circulation. This study supplements institutional sustainability logic for digital-market linkage research and delivers differentiated fiscal and digital policy portfolios to narrow inter-regional development gaps and advance sustainable economic balance.