Introduction

The revitalization of rural areas has gained increasing prominence due to the accelerated expansion and ongoing enhancement of urbanization (Long et al. 2019). This phenomenon is particularly pronounced in China, where rural revitalization constitutes a long-term strategic policy aimed at upholding social equity and fostering high-quality national development. In its March 2024 work report, the Chinese government emphatically reaffirmed its commitment to this initiative, stating, “We should persistently enhance our efforts in the ‘three rural issues’ and robustly advance the comprehensive revitalization of the countryside.” Concurrently, the support for the establishment of small towns with unique characteristics has emerged as a pivotal developmental strategy. This approach seeks to elevate urbanization to a higher level and foster urban-rural integration, thereby catalyzing rural revitalization. The concept of the Characteristic Town represents a novel urban form and industrial cluster that emerges at a certain stage of modern urbanization and economic development. These towns are typically characterized by a relatively small planned land area and population. The primary objective of Characteristic Towns is to harness the agglomeration effect of advanced resources such as talent, technology, and capital, under the guidance of policy initiatives. This strategy aims to nurture and expand local strategic industries, thereby creating a multifunctional space that embodies distinctive local features and achieves an intensive, efficient integration of industry, city, and populace. This model promotes local economic development and represents a significant component of China’s advanced urbanization strategy. The state’s active promotion and encouragement of Characteristic Towns have altered the traditional patterns of urbanization. The distinctive features of these towns, including their smaller populations, unique cultural attributes, and absence of administrative functions, render this development model more adaptable and resilient. This innovative approach offers a fresh perspective on stimulating economic growth, presenting novel avenues for development strategy in the context of rural revitalization.

The interrelationship between urban and rural regions constitutes a pivotal concern within the coordinated development of society. Since 2012, Sichuan Province has embarked on the implementation of the “Characteristic Town” initiative. This policy was further solidified in 2015 with the identification of pilot towns, aiming to expedite the development of Characteristic Towns and address the challenges faced by smaller towns within the province. Recent years have witnessed significant advancements in China’s characteristic towns (Miao and Phelps, 2019). Theoretically, the construction of these towns and the pursuit of rural revitalization function as a dual mechanism that broadens and deepens the scope of urban and rural development. This development model, which fosters rural development through urban initiatives and promotes urban-rural synergies, leverages the “polarization-trickle-down effect” and the “regional network effect.” Specifically, the approach adopted in creating Characteristic Towns not only facilitates socioeconomic integration across urban and rural landscapes but also plays a critical role in catalyzing rural revitalization. Additionally, the infusion of advanced technology and expertise in urban and rural planning is expected to generate a “spillover effect” in these interactions. Moreover, the deployment of advanced urban construction technologies and practices is anticipated to yield further spillover effects, enhancing the economic development of towns with distinctive characteristics. This development is likely to produce positive externalities for environmental protection, aligning with the national agenda for green development. This alignment aims to prevent rural areas from becoming havens for polluting industries, thereby fostering economic strength while preserving ecological integrity. However, it is regrettable that current research has not thoroughly empirically investigated the interplay between the development of towns with unique characteristics and the process of rural revitalization. Specifically, the existence of a “mutually coordinated” relationship between these two facets remains unexplored. Questions persist regarding the potential of these towns to significantly contribute to rural revitalization and offer a novel pathway for rural communities to overcome poverty and achieve prosperity. If such towns can indeed play a supportive or empowering role, further investigation is warranted to elucidate their internal mechanisms of action. Additionally, it is crucial to consider whether the economic revitalization of rural areas might inadvertently exert adverse effects on the environmental landscape.

This study employs empirical analysis to substantiate the beneficial effects of the “Characteristic Town” policy on the rural revitalization strategy. It reaches certain conclusions by analyzing the policy’s mechanisms and its heterogeneity, and it extends the examination to the environmental repercussions of the “Characteristic Town” policy. This research aims to provide innovative ideas and theoretical guidance to support the advancement of rural revitalization strategies across other provinces in China. By doing so, it aspires to foster economic enhancement, environmental protection, and to hasten the implementation of rural revitalization initiatives throughout the nation.

Literature Review

The evolution of society and the advancement of human civilization are intrinsically linked to rural development, with the harmonious growth of rural economies and their environments constituting a significant area of scholarly interest. The literature on this topic typically focuses on several key areas: the development of evaluation systems for rural revitalization, the influence of societal progress on rural revitalization, the construction of Characteristic Towns, and their subsequent assessment.

Evaluation Systems for Rural Revitalization

Rural revitalization remains a formidable challenge within the global development agenda. A fundamental hurdle in addressing this challenge is the establishment of effective measures for assessing rural development. Zhang et al. (2018) refined a set of indicators and target values through the Delphi method, ultimately devising an evaluation system for rural revitalization across five domains: industrial prosperity, ecological livability, cultural civilization in rural areas, effective governance, and affluent living conditions. Abreu et al. (2019) introduced the Rural Development Index (RDI), which assesses rural regions across four dimensions—population, economy, social welfare, and environment—highlighting the previously overlooked issue of regional developmental disparities. Liu et al. (2022) amalgamated the Human Development Index (HDI) with the RDI, selecting key areas such as industrial prosperity, effective governance, ecological sustainability, rural civilization, and quality of life to formulate a rural revitalization index. Li et al. (2021a, 2021b) established a sustainable rural development (SRD) evaluation system that considers ecological and life sustainability. Wang and Huo (2022) developed an index using 10 indicators to gauge the rural revitalization of 30 counties within four cities in Shandong, China. Geng et al. (2023) constructed a framework that assesses and predicts the overall and coordinated development levels of rural revitalization in China, using five dimensions including local economy, ecology, cultural prosperity, social governance, and well-being. Wang and Zeng (2023) selected 26 secondary indicators based on five aspects, including industrial prosperity, to measure the rural revitalization index across 31 provinces, municipalities, and autonomous regions in China.

Impact of Social Development on Rural Revitalization

In examining the effects of social development on rural revitalization, researchers have identified several key areas, including infrastructure development, inclusive finance, network relations, and levels of digitalization. For instance, Jiang et al. (2022) posited that the establishment of infrastructure, particularly environmental protection facilities, enhances inclusive growth in rural areas. Lal (2019) discovered, through a survey-based study, that financial cooperatives can significantly advance rural development. Moreover, Georgios and Barraí (2023) contended that advanced regional network relationships, the diffusion of languages among stakeholders, and the stability of pertinent organizations contribute to innovative social governance in rural regions.

Furthermore, the degree of digitalization plays a crucial role in rural revitalization. Zhang (2023a, 2023b) observed that the advancement of digitally inclusive finance is instrumental in fostering rural revitalization, noting that increased innovation activity not only directly supports this revitalization but also amplifies the enabling effects of digital finance. Han et al. (2023) provided empirical evidence that enhancing the digital skills of rural residents expands their non-farm income sources, thereby improving the economic conditions of rural households. Yin and Choi (2022) demonstrated that well-developed e-commerce platforms significantly narrow the income disparities between urban and rural populations.

In other areas, Li et al. (2021a, 2021b) proposed a comprehensive planning policy strategy for rural revitalization, emphasizing the synergistic application of political and market forces through resource identification, capitalization, and financialization. Tang et al. (2023) explored the relationship between tourism urbanization and rural revitalization using a systems dynamics approach, concluding that the influence of tourism urbanization on rural revitalization is a complex, dynamic process. Liu and Liu (2024) utilized case studies to illustrate that an integrated approach to ecology and industrialization effectively promotes both environmental protection and economic revitalization in rural areas. Lastly, Li (2023a, 2023b) systematically compiled and elucidated the concept of rural resilience, discussing methods for its measurement and highlighting its significance for the stability of rural communities.

Construction of Characteristic Towns

Recent scholarly inquiries into the development of small towns with distinctive characteristics have predominantly concentrated on the underlying laws governing their evolution. Researchers have assessed the progression of such towns and investigated their role in the broader framework of rural revitalization. In a nuanced comparative case study conducted in Ohio, USA, Roundy (2019) identified the presence of entrepreneurial ecosystems within these towns. He highlighted the pivotal role of business associations in reconciling the market and community logic, thereby fostering an innovative milieu conducive to small-town growth. In an exploration of small towns situated in the arid zones of South Africa, Toerien (2018) posited that the infusion of productive knowledge is essential for overcoming developmental hurdles. He argued that leveraging local resources to cultivate niche industries could effectively surmount environmental limitations. Further research by Powe et al. (2022) into small towns in the United Kingdom and New Zealand emphasized the significance of self-reorientation and community connectivity. These factors were deemed crucial for gaining access to external support, enhancing the towns’ developmental prospects. Artz et al. (2021) conducted a study focused on small towns in Iowa, USA, and discerned that human resources and market agglomeration were more effective in attracting enterprises than natural conditions or fiscal policies. This finding underscores the importance of a skilled workforce and clustered markets in small-town economic strategies. Kaufmann and Wittwer (2019) addressed the reliance of micro, small, and medium-sized enterprises on regional networks. Their research indicated that for small towns aspiring to attract such enterprises, it is imperative to foster collaboration with local institutions and community groups. Lastly, Song and Gu (2019) categorized the factors influencing the sustainable development of characteristic towns into four main dimensions: industry, talent, system, and ecological drive.

Evaluation of Characteristic Town Development

Scholars have extensively analyzed the development of Characteristic Towns. Wangzhou et al. (2023) developed an ecotourism resource evaluation model tailored specifically for Characteristic Towns. This model integrates various factors such as the conditions of town construction, the ecological environment, resource endowment in ecotourism, development conditions, and tourism capacity. The purpose of this model is to foster sustainable development within the tourism industry of these towns. Additionally, Lin et al. (2020) constructed a competitiveness evaluation index system for Characteristic Towns, employing the comprehensive competitiveness “bowstring arrow” model. Their findings indicate that the competitiveness of agricultural Characteristic Towns in Sichuan Province is generally low.

Further research has incorporated specific data samples to explore other dimensions. Zhang (2023a, 2023b) investigated the typology and spatial distribution characteristics of Characteristic Towns in Sichuan Province, utilizing 41 towns as case studies. In a related study, Zhang (2022) examined how Characteristic Towns contribute to economic development through a case study of Yangzhou, noting that some towns deviate from the urbanization strategy’s focus on inclusiveness and equity. Yu et al. (2023) analyzed survey data from 31 provinces in China, concluding that small towns are pivotal in rural areas for providing daily necessities, facilitating agricultural trade, offering non-farm employment opportunities, and supporting basic education and medical services. Their research underscores the significant role that development of small and medium-sized towns plays in achieving rural revitalization.

Regarding the interrelationship between new urbanization and rural revitalization, Xu and Wang (2024) analyzed the coupling and coordination between these two phenomena. They observed a positive trend in their integration, suggesting that new urbanization facilitates rural revitalization to some extent, albeit with notable regional disparities. These variations are primarily influenced by infrastructure construction, industrial development, and governmental intervention and coordination. Conversely, Li and Zhang (2023) argued that China’s new urbanization and rural revitalization strategies are currently experiencing a phase of friction. They identified environmental innovation, government capacity, openness, and population agglomeration as critical drivers for enhancing the synergy between these two initiatives. Yin et al. (2021) contended that small and medium-sized towns do not necessarily exhibit lower economic densities compared to cities of similar size. They asserted that the advancement of new urbanization can effectively integrate urban and rural development, thereby facilitating rural revitalization.

Literature Gap: Distinguishing the Study’s Unique Contributions

Upon reviewing the existing literature, this study delineates several innovations that distinguish it from prior research in the field. Firstly, this investigation employs the did model to systematically evaluate the policy effects of Sichuan province’s “Characteristic Town” policy on rural revitalization at the granular level of counties and districts. This approach not only effectively mitigates the issue of endogeneity but also serves as a valuable augmentation to the corpus of research concerning the construction of characteristic towns in China. Secondly, in contrast to previous studies that have explored the mechanisms of rural revitalization by amalgamating case studies or theoretical frameworks, the current study probes the intrinsic logic governing the role of the “Characteristic Town” in fostering rural revitalization. This exploration is conducted through the lenses of efficiency enhancement and economies of scale. Furthermore, this research conducts heterogeneity analyses that consider the regional economic endowments and spatial scaling advantages. It extends its examination to include environmental constructs and, upon verification, ascertains that the “Characteristic Town” policies in Sichuan province significantly bolster rural revitalization. The findings reveal that the aforementioned policy can significantly enhance rural revitalization through economic and ecological empowerment. The conclusions drawn from this study may serve as a valuable reference for other provinces in China aiming to implement rural revitalization strategies effectively. For instance, Wang (2023) argues that the digital economy can facilitate rural revitalization, while Li (2023a, 2023b) confirms that cultural construction plays a pivotal role in empowering rural revitalization.

Theoretical Analysis and Research Hypothesis

The ultimate objective of the rural revitalization strategy is to achieve affluent living standards, with the “Characteristic Town” policy specifically designed to promote the integrated development of urban and rural areas. This policy aims to leverage the supportive capacity of advanced small-town infrastructure to facilitate the rural revitalization strategy, ultimately fostering common prosperity between urban and rural settings (Li, 2023a, 2023b; Li, 2024). Rural revitalization encompasses the comprehensive enhancement of five key areas: industry, talent, culture, ecology, and organization. Here, industry acts as the focal point, talent as the crucial element, culture as the essence, ecology as the cornerstone, and organization as the backbone of rural revitalization (Wang, 2023; Ma, 2024; Xu et al. 2024). This multifaceted strategy was articulated by the Chinese government in the report presented at the 19th National Congress.

The positive impacts of the “Characteristic Town” policy are articulated as follows. The implementation of the “Characteristic Town” policy facilitates the provision of government support to pilot towns through specialized financial expenditure subsidies, tax incentives, and other preferential measures (Yu et al. 2018; Chao and Qin, 2023).

Firstly, grounded in the principles of financial resource allocation, governmental tools such as specific financial outlays are employed to achieve optimal resource distribution in pilot towns. This strategy enhances the efficiency of resource utilization and bolsters the infrastructure development within these towns. Consequently, pilot towns can leverage their improved infrastructure and inherent resource benefits to develop distinctive local industrial structures. This process engenders a competitive dynamic among towns, which not only invigorates the economy of these pilot towns but also expands the residents’ income sources, elevates living standards, and provides a robust impetus for their affluent living and the shared prosperity of urban and rural communities.

Secondly, the development of towns with unique characteristics underscores a multidimensional, synergistic, and complementary integration of economic structures, the circulation of production factors and resources, the collaborative advancement of industries, institutional governance, and ecological considerations across urban and rural settings. This approach fosters a model of urban-rural synergy and connectivity, which facilitates the “polarization-trickle-down effect” and the “regional network effect”. This coordinated dual-system not only aids in promoting socio-economic integration between urban and rural areas but is also expected to positively influence rural revitalization (Zhang et al. 2019).

Lastly, aligned with the “new development” concept, the construction of Characteristic Towns supports urbanization by optimizing the industrial structure of both urban and rural locales and ensuring adherence to green and sustainable development principles. This approach constructs a shared ecological value chain between urban and rural areas, particularly promoting the transfer of energy-efficient and environmentally sustainable industries to rural areas, such as agri-tourism and tourism-related agriculture.

This initiative successfully mitigates the administrative and economic divisions between urban and rural areas, thereby facilitating rural economic development and addressing urban challenges. Xia et al. (2024) identified a significant relationship between rural green development policies and economic growth, while Zhao and Zou (2021) contend that innovative policy initiatives in towns catalyze rapid rural development. Based on these findings, this study proposes the following hypothesis:

H1: The implementation of the “Characteristic Town” policy can directly empower the rural revitalization strategy.

The implementation of the “Characteristic Town” policy significantly accelerates the process of industrial agglomeration in pilot towns. For instance, the development of pastoral complexes in Guizhou province, China, has been notably effective in promoting the optimization of the industrial structure (Wang and Zhang, 2019). This optimization facilitates the flow and sharing of production factors such as labor, capital, science, and technology, thereby enhancing resource allocation efficiency within these pilot towns. As a result, there is a strategic reallocation of resources from less efficient sectors to those industries exhibiting higher efficiency, ultimately leading to an enhancement of total factor productivity (tfp) (Nie, 2021). This improvement in productivity is crucial for fostering high-quality development of the county’s economy, which, in turn, elevates the living standards of local residents and contributes to their prosperity. The advancement and enactment of the “Characteristic Town” policy also significantly extend the development and sales chain of agricultural products between urban and rural areas. This extension facilitates the connection between the production and processing stages of agricultural products, involving both urban and rural farmers and enterprises. Such integration results in an industrial agglomeration effect that merges industry with agriculture, thereby stimulating the rural economy of pilot townships.

Concurrently, the acceleration of industrial agglomeration and the enhancement of the industrial structure generate numerous high-quality employment opportunities in pilot towns, particularly in sectors providing essential services like healthcare, housing, education, and pension services. This creation of employment opportunities not only assists in retaining young adults and skilled labor in these towns, thereby gradually establishing a labor force with scale advantages, but also supports the towns in achieving higher levels of economic development through economies of scale based on established industrial characteristics. These developments further drive income increases for residents and aid in the achievement of common prosperity in both urban and rural settings.

Furthermore, the ongoing urbanization process and the construction of urban-rural transportation infrastructure significantly improve the infrastructure supply system. This improvement provides a robust “hardware” foundation that is instrumental in developing economies of scale and enhances the role of the urban economy in stimulating the surrounding rural economy. The “Characteristic Town” policy also elevates the level of rural civilization, which positively influences farmers’ efforts and ultimately supports the development of the rural industrial economy (Li, 2023). Additionally, Nie (2021) highlighted that the policy not only promotes rural infrastructure development but also boosts agricultural total factor productivity. Employing panel data from 30 provinces in China covering the period from 2008 to 2020, Li et al. (2024) empirically demonstrated that the “Characteristic Town” policy significantly enhances the agricultural economy of scale.

Based on the foregoing analysis, the present study advances the following research hypotheses:

H2a: The “Characteristic Town” policy fosters rural revitalization by enhancing total factor productivity.

H2b: The “Characteristic Town” policy supports rural revitalization by facilitating economies of scale.

Furthermore, the “Characteristic Town” policy categorizes the development of these towns into three distinct construction types: industrial, tourism, and trade. This classification is based on the diverse economic endowments and spatial scales of the pilot towns.

Towns that possess comparative advantages in industrial resources and a robust industrial base are prioritized for comprehensive enhancements in infrastructure within industrial parks and the development of ancillary service capacities. The aim is to develop towns with distinct industrial characteristics. Conversely, towns endowed with a rich historical heritage, cultural assets, and natural resources will see efforts to further refine their cultural identity and boost their capacity to accommodate visitors, thereby transforming into tourist-centric towns. Lastly, towns with advantageous transportation links, a vibrant commercial and cultural milieu, and a solid foundation in commercial resources are targeted for the expansion of commercial districts. These efforts include the augmentation of regional warehousing and logistics capabilities, with the objective of establishing towns with a commercial and trade orientation.

Additionally, the “dual economic structure” and “regional network effect” generated by promoting the township with the city’s model have significant spatial spillover effects. As the urban and rural industrial chains extend both horizontally and vertically, numerous new industrial forms are anticipated to emerge. Moreover, areas that possess superior spatial scale advantages tend to have foundational benefits in both “hardware” and “software” when undertaking industrial transfers and agglomerations. Consequently, the construction of Characteristic Towns, which aim to enable rural revitalization, is often more evident in regions with these spatial advantages. The “Characteristic Town” policy does more than merely transfer or spill over urban industries into rural areas. Instead, it synergizes the superior resources of the city with the unique attributes of the countryside to actively support the economic development and modernization of rural areas. This approach helps to avoid the “pollution trap” typically associated with traditional rural development. By doing so, it not only avoids the pitfalls of overextending future economic prospects and entering a vicious cycle but also establishes a more favorable policy and technical environment for sustainable rural development. Therefore, there may be variations in the positive impacts of the “Characteristic Town” policy on the implementation of the rural revitalization strategy in pilot towns and on enhancing the well-being of residents. These variations include differences in resource endowment (Jiang and Ji, 2011) and in spatial-scale advantages (Li and Jiang, 2017).

Based on this understanding, this study proposes the following hypotheses:

H3a: The “Characteristic Town” policy empowers rural revitalization with regional economic development endowment heterogeneity.

H3b: The “Characteristic Town” policy empowers rural revitalization with spatial-scale advantage heterogeneity.

Research Design

Modeling and Variable Selection

This study employs the did model to evaluate the effects of Sichuan Province’s 2015 “Characteristic Town” policy on rural revitalization. The baseline model is established as follows:

$${{\rm{eco}}}_{{\rm{i}},{\rm{t}}}=\alpha +{\rm{\beta }}{{\rm{did}}}_{{\rm{i}},{\rm{t}}}+\sum {\rm{\gamma }}{{\rm{X}}}_{{\rm{i}},{\rm{t}}}+{{\rm{\delta }}}_{{\rm{i}}}+{{\rm{\theta }}}_{{\rm{t}}}+{{\rm{\varepsilon }}}_{{\rm{i}},{\rm{t}}}$$
(1)

The explanatory variable, \({{\rm{eco}}}_{{\rm{i}},{\rm{t}}}\), represents the rural revitalization metric for county \(i\) at time \(t\). Given that living in prosperity is both the initial motivation and ultimate objective of the rural revitalization strategy (Huang, 2018), this study adopts the approach suggested by Bluhm and Krause (2022) to gauge the growth in regional residents’ income. This is measured using the average value of DMSP/OLS nighttime light data for each county in Sichuan ProvinceFootnote 1. Since rural revitalization fundamentally aims to promote socio-economic development in rural areas, the increase in residents’ income can, to some extent, serve as an indicator of rural revitalization.

The variable \({{\rm{did}}}_{{\rm{i}},{\rm{t}}}\) is a policy interaction term set to 1 if county \(i\) was targeted by the “Characteristic Town” policy in year t, and set to 0 otherwise.

\({{\rm{X}}}_{{\rm{i}},{\rm{t}}}\) represents a set of control variables, which include the regional urbanization rate (urban), the level of societal fixed investment (invest, expressed as the natural logarithm of total fixed asset investment per capita), the degree of agricultural development (irrigate, expressed as the rate of irrigated land), and the level of education (pre_edu, expressed as the pupil-teacher ratio in elementary schools; mid_edu, represented by the pupil-teacher ratio in general secondary schools). Additionally, \({{\rm{\delta }}}_{{\rm{i}}}\) represents the area-fixed effect, \({{\rm{\theta }}}_{{\rm{t}}}\) represents the time-fixed effect, and \({{\rm{\varepsilon }}}_{{\rm{i}},{\rm{t}}}\) is the residual term.

Data Sources

The study’s sample includes 169 counties across Sichuan Province, China, covering the period from 2012 to 2020, accounting for some instances of missing data. Missing data points were interpolated and adjusted to 2010 comparable prices using deflation (Moeka et al. 2024). The primary data sources were the China County Statistical Yearbook (2013–2021) and the Sichuan Provincial Statistical Yearbook (2013–2021), with additional data manually organized as needed.

Descriptive Statistics

Table 1 displays the descriptive statistics for the main variables. The mean value of the rural revitalization explanatory variable (eco) is 0.4418, with a maximum of 3.8282 and a minimum of 0.0003, indicating significant variations in the economic development across districts and counties (cities) in Sichuan Province. The control variables, including urbanization (urban), social investment (invest), agricultural development (irrigate), education levels (pre_edu and mid_edu), and regional population density (lnpm), also show varying degrees, aligning with findings reported in existing literature.

Table 1 Descriptive statistics.
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Empirical Results and Analysis

Benchmark Regression

Columns (1) to (3) of Table 2 examine the impact of the “Characteristic Town” policy on rural revitalization. Columns (1) and (2) display the results of the regressions without and with the inclusion of county-year fixed effects, respectively, revealing that the estimated coefficients on the core explanatory variable are significantly positive. Column (3) presents the regression results after introducing a series of regional characteristic variables; here, the coefficient of the interaction term is significantly positive at the 5% level. This indicates that residents’ incomes in regions implementing the “Specialized Small Town” policy increased by 4.88% compared to regions that did not. Furthermore, as the parallel trend hypothesis is a crucial assumption for policy evaluation using the did model, Columns (4) and (5) of Table 2 present the results of the parallel trend test. The findings show that the estimated coefficients are not significant prior to policy implementation, but become significant and increase during the period of policy implementation. This confirms that there was no significant difference in the level of residents’ income between the treatment and control groups before the implementation of the “Characteristic Town” policy, thus validating the parallel trend hypothesis.

Table 2 Benchmark regression and parallel trend test.
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Robustness Check

Substitution of Explanatory Variables

Prior research often used the night light index of districts and counties to gauge economic development levels. Building on this, the current study adopts per capita total savings (expressed in natural logarithms) as an alternative measure of rural revitalization and re-tests the regression. The results in column (1) of Table 3 show that the coefficient of did is significantly positive at the 10% level, suggesting that the “Characteristic Town” construction initiative substantially fosters rural revitalization. This supports the primary conclusion of this research as both robust and reliable.

Table 3 Robustness test.
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Instrumental Variable

In our previous empirical analysis, although the difference-in-differences model, based on the “Characteristic Town” policy as a quasi-natural experiment, effectively mitigates the endogeneity issue, concerns about reverse causality remain. This concern arises because economically prosperous townships or those with distinct industrial characteristics are more likely to be selected for inclusion in the list of characteristic towns. These townships might also be significantly influenced by local development conditions, such as geographic ___location and resource endowment, during policy formulation. Consequently, this study employs the instrumental variable method to perform a robustness test. Specifically, we use the number of townships in a county as the instrumental variable (iv). The rationale is that counties with a higher number of townships are more likely to develop characteristic industries and, therefore, are more likely to be chosen for the Characteristic Town construction plan, thereby meeting the relevance criterion. However, the number of townships is likely a result of historical administrative decisions and does not directly impact rural revitalization, rendering it somewhat exogenous. According to Table 3, column (2) displays the results of the first-stage regression using instrumental variables, showing a significantly positive coefficient for iv at the 1% level. The first-stage F-value is 11.61, and the K-P rk LM statistic is 17.08, both of which confirm that the instrumental variables are appropriately correlated. Column (3) presents the second-stage regression results from the instrumental variables estimation; the estimated coefficient of did is significantly positive at the 5% level. This indicates that the Characteristic Town Construction Initiative can effectively support rural revitalization, further confirming the robustness of the main findings of this study.

Considering Interference from Other Policies During the Sample Period

During the sample period, several policies aimed at supporting rural development were implemented in Sichuan Province. These included the pilot work of rural revitalization planning, the pilot work of reforming the administrative system in economically developed towns, and the initiatives to consolidate townships and merge towns in Sichuan Province since 2018. This study incorporates these three policies as control variables and re-runs the regression analysis. According to the results shown in column (4) of Table 3, the estimated coefficient of did remains significantly positive even after accounting for these significant policy interferences. This result underscores the reliability of the conclusion that the 100-town construction action effectively promotes rural revitalization.

Placebo Testing

This study advances the time point of policy implementation to 2014, introduces a new policy variable (did2), and conducts a regression analysis once more. The estimation results presented in column (5) of Table 3 reveal that the estimated coefficient of did2 is not statistically significant. This outcome indirectly confirms the uniqueness of the Characteristic Town building initiative’s policy, demonstrating that it is not confounded by unaccounted factors. Consequently, the core findings of this study remain robust. To further validate these findings, the study employs a method involving 500 random samples to generate a placebo test plot (Fig. 1). The plot illustrated in Fig. 1 shows that the distribution of the estimated effects of the “Characteristic Town” policy centers around 0 and is approximately normally distributed. This suggests that the impact of unobserved random factors on the baseline model’s estimation results is minimal. Therefore, this supports the primary conclusions of the study, confirming their robustness.

Fig. 1
figure 1

Placebo test chart.

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Impact Mechanism Testing

In this section, we examine the impact of the “Characteristic Town” policy on rural revitalization and development through the lenses of efficiency improvement and economies of scale. Specifically, our study employs the OP estimation method to calculate the total factor productivity of each county, which serves as an indicator of local production efficiency and resource allocation efficiency improvements. Following the approach of Gao and Gao (2018), we use the logarithm of the population size (measured in units of 10,000 people) of the jurisdiction to gauge population scaling (psize). The regression results presented in Column (1) of Table 4, with regional tfp as the explanatory variable, reveal that the estimated coefficient of did is 0.0384 and is statistically significant at the 1% level. This finding suggests that the implementation of the policy enhances the mobility of production factors, consequently boosting production efficiency. Furthermore, as shown in Column (2), the estimated coefficient of the triple interaction term did×tfp is significantly positive at the 1% level. This indicates that the enhancement of total factor productivity plays a crucial role as a mechanism for rural revitalization, facilitated by the “Characteristic Town” policy. Additionally, Column (3) displays the estimation results with the population size indicator (psize) as the explanatory variable. Here, the policy implementation variable is 0.0635 and significant at the 1% level, demonstrating that the establishment of Characteristic Towns contributes to population growth and enhanced governmental governance capacity. Column (4) presents the regression results after incorporating the cross-multiplier term of did and psize into the baseline model. It is observed that the coefficient of did × psize is positive (0.2265) and significant at the 1% level. This suggests that the policy-driven population scaling advantage helps optimize the government’s governance structure, thus unleashing the positive externalities associated with managing jurisdictional scales and promoting rural revitalization and development.

Table 4 Mechanism test.
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Heterogeneity Test

Regional Economic Development Endowments

During the implementation of government policies, regional disparities in economic development endowments can significantly influence the effectiveness of these policies and their social acceptance (Xu et al. 2021). In light of this, our study adopts the research approach proposed by Qiang and Jian (2020) and categorizes the entire sample based on regional topographic and geomorphological features. Specifically, areas with plains are considered regions with superior economic development endowments, whereas areas with less favorable topographies are viewed as regions with weaker economic development endowments. This classification allows us to further explore the disparities in the implementation of the “Characteristic Town” policy across regions with varying economic strengths. According to the results presented in columns (1) and (2) of Table 5, it is evident that in regions endowed with better economic resources, the “Characteristic Town” policy significantly enhances the utilization of these endowments, promoting industrial growth, rural revitalization, and an increase in residents’ income levels. Conversely, in regions with weaker economic endowments, the policy does not significantly impact the promotion of these areas.

Table 5 Heterogeneity test.
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Advantages of Regional Spatial Scaling

As noted by Wang et al. (2021), the expansion of spatial scale and scope can enhance competitive pressures among enterprises, phase out inefficient ones, and improve the efficiency of resource allocation. Building on this premise, our study delves into the variances among regions characterized by different spatial scales, in terms of advancing rural revitalization through the “Characteristic Town” policy. Drawing from the methodology of Gao and Gao (2018), this research utilizes the geospatial areas of jurisdictions to denote spatial scale advantages and applies the median of these areas as a criterion for sample division. This division categorizes regions into those with higher and lower spatial scale advantages. The findings, as shown in columns (3) and (4) of Table 5, indicate that the benefits derived from the establishment of Characteristic Towns are instrumental in overcoming the challenges posed by inadequate spatial scaling, thereby fostering local economic development and facilitating rural revitalization.

Further Analyses

Rural revitalization must not overlook the fundamental requirements of environmental protection and sustainable ecological development (Wen, 2023). Achieving rural revitalization requires a delicate balance between economic growth and environmental sustainability (Li et al. 2019; Ortega et al. 2020). While the Characteristic Town policy significantly promotes rural revitalization, questions arise regarding its impact on the environment. Specifically, does economic development under this policy lead to both a robust economy and ecological degradation? To explore this issue, this section empirically examines whether the implementation of the Characteristic Town policy influences air pollution levels in rural areas. We utilized the natural logarithm of the daily average PM2.5 concentration as the dependent variable to investigate whether the initiation of the Characteristic Town policy adversely affects the PM2.5 levels. The estimation results in Table 6, detailed in columns (3) and (4), indicate that the policy does not worsen local air quality. Furthermore, the implementation of this policy has not resulted in a deterioration of local environmental standards due to industrial construction and relocation. These findings suggest that the policy not only fosters economic growth but also preserves the ecological environment, thus achieving the dual goals of economic strength and ecological sustainability.

Table 6 Further analysis.
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Managerial Implications

This study presents several managerial implications for enhancing government strategies, specifically regarding the development of “Characteristic Towns” and the promotion of rural revitalization.

Firstly, the phased construction of Characteristic Towns needs to be continuously advanced, leveraging the resource allocation capabilities of policies to support rural revitalization. On one hand, the government should allocate more specialized funds to expedite the development of rural infrastructure, including improvements in transportation, water management, energy, and information technology systems. These enhancements will not only elevate the environment for rural economic development but also improve the standard of public services. On the other hand, township governments must refine their employment service systems. This involves establishing diverse employment services, enhancing farmers’ job skills, facilitating the migration of rural talent to urban areas, and creating additional employment opportunities, thereby fostering rural revitalization.

Secondly, it is crucial to focus on achieving rural revitalization by enhancing the efficiency and benefiting from economies of scale in the construction of characteristic towns. These towns should concentrate on improving the quality of the investment environment, transforming rural investment services, and providing more opportunities for rural economic development. Emphasis should be placed on the interplay between market labor division and transaction costs, harnessing the positive feedback from productivity enhancements, attracting human capital, and maximizing economies of scale to further rural revitalization.

Thirdly, attention should be given to the varied policy impacts of the “Characteristic Town” initiative across different regions, ensuring that policy dividends are effectively distributed through targeted measures. For instance, in regions with diverse economic development capabilities, the government should adopt policies that acknowledge both common and specific needs. In areas with limited spatial advantages, it is vital for the government to integrate local resources effectively, strengthen governance capabilities, and refine governance structures to collaboratively advance rural revitalization.

Finally, the “Characteristic Town” policy should not only focus on economic development but also on the protection of the ecological environment within rural areas. Characteristic towns should prioritize policies that support resource utilization and environmental protection when selecting industries, thereby avoiding the pitfalls of pollution-heavy enterprises. Moreover, the government should advocate for the adoption of environmental protection technologies in rural areas, promoting the modernization of local industries.

Conclusions

The dynamic between urban and rural areas represents a critical aspect of social development and a significant source of rural development challenges worldwide. As China’s economy shifts toward high-quality development, rural revitalization driven by urbanization emerges as a key trend for the future. In this context, the construction of characteristic towns plays a crucial role in propelling rural revitalization. This study, based on 169 county-level panel data and county-scale DMSP/OLS nighttime lighting data from 2012 to 2020, empirically examines the effects of the “Characteristic Town” policy on rural revitalization in Sichuan Province using the DID method. The main findings are as follows: Firstly, the pilot “Characteristic Town” policy significantly fosters rural revitalization, a result that withstands further validation through the instrumental variables method and multiple robustness tests. Secondly, mechanism analysis indicates that the policy enhances rural revitalization by improving production efficiency and encouraging population agglomeration. Thirdly, heterogeneity analysis reveals that the policy’s effectiveness is more pronounced in regions with greater economic resources and spatial advantages. Lastly, further examination shows that the “Characteristic Town” policy effectively supports rural revitalization, promoting both economic robustness and ecological sustainability.