Could the ‘District-to-County’ Policy Suppress Economic Growth? – A Case Study of Yichun, China

The ‘district-to-county’ policy is regarded as a counter-urbanization policy, yet its impact on economic growth is still uncertain. Utilizing the panel data from the district-level units within Yichun and the city-level units in Heilongjiang Province, this paper investigates the effects of the ‘district-to-county’ policy on the economic development at both the intra-city and inter-city levels by difference-in-differences model. The results show that the ‘district-to-county’ policy effectively spurs economic development in the reform areas within Yichun, but exhibits an inhibitory effect compared to other cities in Heilongjiang. Multiple robustness tests support these conclusions. Furthermore, the mechanism analysis reveals that this policy promots economic growth at the intra-city level by enhancing consumption and promoting agricultural development, but causes Yichun’s economic growth to lag behind other cities through consumption and investment at the inter-city level.