ABSTRACT Developing characteristic rural industries has become an essential strategy for optimizing rural industrial structures and enhancing farmers' incomes. In this paper, we consider the policy of establishing Chinese Characteristic Agricultural Product Advantage Zones (CAPAZ), and employ county‐level panel data and a multi‐period difference‐in‐differences (DID) model to assess the policy's contribution to common prosperity from the dual perspectives of income enhancement and equity improvement. The results show that CAPAZ development significantly raises rural incomes and reduces the urban‐rural income gap. Specifically, the policy increases rural residents' income by an average of 0.9% and narrows the urban‐rural income gap by approximately 2.5%. Mechanism analysis reveals that the policy promotes rural innovation, facilitates the emergence of new business entities, and amplifies innovation‐driven and entity‐driven effects, thereby supporting both income growth and equity outcomes. Further, the common prosperity effects exhibit notable nonlinearities: the impact on income growth follows a U‐shaped trajectory, while the gap‐narrowing effect strengthens with larger initial disparities. Heterogeneity analysis indicates that the policy's effects are more pronounced in remote counties and are reinforced by strong fiscal support and favorable financial environments. The effects on common prosperity also differ by product type. Specifically, the impact is stronger in CAPAZs that specialize in food crops, aquaculture, and livestock, while it is comparatively weaker in those focused on cash crops. These findings provide robust empirical evidence for advancing characteristic industrial development as a viable pathway toward achieving common prosperity.
You et al. (Wed,) studied this question.