Integrated urban-rural development is an inevitable requirement of the Chinese path to modernization, and also a key measure to break through the bottleneck of county-level economic growth. Since the reform and opening up, the urban-rural relationship has gone through stages of imbalanced and coordinated development, and is currently moving towards a new stage of integrated urban-rural development. In order to explore effective paths for integrated urban-rural development and reshape a new urban-rural relationship, the Chinese government released the policy of National Pilot Zones for Integrated Urban-Rural Development in 2019.

Using the county-level panel data from 2013 to 2022 and a DID model, this paper examines the impact and mechanism of the establishment of pilot zones on the county-level economy. The results show that the pilot zone policy significantly promotes county-level economic growth, and this effect is achieved through four channels: non-agricultural industry agglomeration, population inflow, construction land supply, and technological innovation. However, the pilot zone policy also exerts a kind of “siphon effect” that suppresses the economic growth of counties within 150km of a pilot zone. Meanwhile, the growth effect of pilot zones is more significant for counties with better digital finance development, smaller government expenditure scales, lower dependence on nature resources, and belonging to prefecture-level cities.

The contributions of this paper are as follows: First, it evaluates for the first time the growth effect of pilot zones on the county-level economy, providing new empirical evidence for the study of various “policy pilot” effects in China. Second, it deeply analyzes the internal mechanism from four dimensions, enriching our understanding of the internal laws of China’s county-level economic growth. Third, it not only identifies the positive role of pilot zones in improving the county-level economy, but also reveals some shortcomings and weaknesses of the current pilot zone policy.

Therefore, this paper provides empirical evidence for the economic effect of the pilot zone policy, and also provides policy implications for boosting the county-level economy and promoting coordinated regional development in the new era.