Toward Sustainable Development Goals: How Does Factor Market Integration Affect Common Prosperity?

To achieve Sustainable Development Goals (SDGs) 10 and 17, exploring the potential linkages between factor market integration and common prosperity is necessary. However, limited research examines whether and how factor market integration affects common prosperity. This study analyzes panel data from 30 Chinese provinces (2010–2020) using Ordinary Least Squares and Fixed Effects models to empirically investigate this relationship. The results show that factor market integration significantly enhances common prosperity, a conclusion supported by robustness checks. Further analysis reveals that factor market integration promotes common prosperity through industrial upgrading and improved labor productivity. Additionally, the digital economy positively moderates this relationship. Heterogeneity analysis reveals a more pronounced impact in China's eastern and western regions. We recommend advancing factor market integration, prioritizing digital economy development, promoting industrial upgrading, and enhancing labor productivity to achieve common prosperity. Our conclusions also offer theoretical guidance and practical insights for other economies striving toward SDGs and common prosperity.