The impact of China's regional economic integration strategy on the circular economy: Policy effects and spatial spillovers

Concerns about global climate change, resource scarcity, and environmental degradation continue to escalate. Within this context, the circular economy has received widespread attention as a model of sustainable development. Simultaneously, China's regional economic integration (REI) strategy has been regarded as an important tool for promoting economic growth and optimizing resource allocation. However, existing studies have mainly focused on the impact of REI on economic growth, and there are insufficient empirical studies on how this strategy affects the circular economy. Still fewer such studies are set in a unified research framework; there is also a lack of heterogeneity analyses that introduce carbon emission characteristics. Therefore, this study analyzes panel data from urban centers in China, spanning from 2007 to 2021 and focusing on the Yangtze River Delta (YRD). Using the staggered difference-in-difference (DID) model, propensity score matching and difference-in-difference (PSM-DID), spatial Durbin model, entropy weight TOPSIS, and other methods, this study examines the policy effects and spatial spillovers of the REI strategy on the circular economy. This study also quantifies the policy implications of REI on the circular economy, analyzes the heterogeneous effects of REI in cities with different carbon emission levels, and explores the spatial spillover effects of REI on the circular economy. The key findings are that: (1) REI implementation effectively promotes a circular economy. (2) There is heterogeneity in this effect at different levels of carbon emissions. The promotion effect is more significant for high carbon emission cities, while the integration strategy has a smaller marginal effect on the circular economy of low carbon emission cities. (3) There are spatial spillover and regional linkage effects at the interregional level, indicating a significant spatial dependence between REI and the circular economy. In other words, strategy implementation in one city positively influences the circular economy in neighboring cities. This study systematically and empirically investigates the impact of REI on the circular economy, reveals the heterogeneity of the carbon emission levels of REI affecting the circular economy, and provides new evidence for the environmental Kuznets curve theory. Furthermore, the spatial spillover effect of REI is quantified; quantifying the spatial spillover effect of REI expands the spatial dimension of regional sustainable development. Ultimately, this study emphasizes the need to maximize the environmental benefits of the REI strategy on the circular economy. This could be done by designing cross-regional circular economy projects, coordinating regional policy efforts, and implementing differentiated strategies to promote sustainable development.