How Rural Innovation and Entrepreneurship Can Promote Common Prosperity for Farmers and Rural Areas

The robust growth of rural innovation and entrepreneurship has provided ample endogenous momentum for farmers and rural areas to steadily progress towards common prosperity. Utilizing the Rural Innovation and Entrepreneurship Index published by the Zhejiang University Carter-Qian research team, and grounded in balanced panel data from 1650 counties in China spanning from 2014 to 2022, this study establishes a double machine learning model to discern the causal effect and underlying mechanism between rural innovation and entrepreneurship and farmers' common prosperity in rural areas. This analysis encompasses three dimensions: the absolute value of farmers' income, the urban-rural income gap, and the regional income disparity among farmers. The findings reveal that rural innovation and entrepreneurship significantly boost farmers' income, bridge the urban-rural and regional farmers' income gaps, foster common prosperity for farmers and rural areas and notably curb the "elite capture" phenomenon. This conclusion remains valid even after various robustness tests. Mechanism analysis indicates that rural innovation and entrepreneurship primarily achieve common prosperity among farmers in rural areas by facilitating the growth of the new rural collective economy, refining the urban-rural employment structure, expediting industrial structure upgrading, and attracting labor and capital elements back to rural areas. Heterogeneity analysis highlights that rural innovation and entrepreneurship play a more pronounced role in advancing common prosperity among farmers and rural areas, particularly in central and western regions, e-commerce demonstration counties in rural areas, former national poverty-stricken counties, and regions with substantial government support. This study offers a reference for putting forward rural revitalization in all aspects and fulfilling common prosperity for farmers and rural areas.