Asymmetric Internet Attention, Domestic Market Integration, and Inter-City Income Gaps

【Authors】

ZOU Wei, HUANG Renhao

【WorkUnit】

Wuhan University, 430072.

【Abstract】

Summary:Digital infrastructure—encompassing broadband internet, communication networks, and software applications—has fundamentally reshaped the channels and costs of information transmission, laying a critical foundation for high-quality digital information networks. Advanced search engines and algorithmic recommendation systems now enable internet users to access relevant information rapidly without traditional media intermediaries. The expansion of digital information networks plays a pivotal role in mitigating interregional information asymmetry, lowering transaction costs from non-institutional barriers, and accelerating market integration. In traditional economic systems, geographical disparities often impede effective supply-demand matching, constraining market efficiency and resource allocation. This inefficiency forces market participants to bear higher transaction costs, reinforcing non-institutional segmentation. While internet platforms have reduced local bias by expanding access to distant markets, the fundamental limitation of finite attention resources still constrains the extent of information acquisition. Greater allocation of internet attention represents increased cognitive investment, leading users to favor regions with higher information exposure.
Internet technology has reshaped both the methods and costs of acquiring attention resources, while asymmetric internet attention affects the market integration and income gaps between cities. This paper combines data from the Baidu search index, city-level input-output tables, and city statistical yearbooks in China, to systematically examine how asymmetric internet attention affects inter-city income gaps through three market intergration: population migration patterns, commodity trade flows, and capital flows. The findings reveal that increased internet attention from high-income to low-income cities generates a “supporting effect” that narrows income gaps. In contrast, internet attention flowing from low-income to high-income cities results in a “crowding-out effect” that exacerbates these gaps. These conclusions remain robust after a series of robustness tests. Heterogeneity analysis further shows that the gap-reducing effect is 5.6 times stronger in rural areas than in urban areas. Mechanism analysis identifies short-term and long-term migration patterns, trade costs of final and intermediate goods, and flow costs of fixed and current capital as key mediating factors, explaining how asymmetric internet attention contributes to income convergence across cities. This paper provides new insights into how the internet fosters regional common prosperity.
This paper makes three key contributions. First, it enriches the literature on regional economic integration by examining the role of attention resource allocation from a microeconomic perspective. Unlike previous studies which predominantly focus on digital transformation and technological advancements in the digital economy, this study employs internet search indices to measure inter-city internet attention. Second, it pioneers the analysis of asymmetry in inter-city internet attention and its implications for income distribution. By identifying and quantifying asymmetries in bilateral internet attention, this paper highlights its role in narrowing inter-city income gaps, thereby expanding research perspectives on digital connectivity and economic inequality. Third, it systematically investigates the mechanism by exploring how asymmetric internet attention affects domestic market integration. By quantifying asymmetries in population mobility, commodity trade, and capital flow, this study constructs relative mobility indices as mediating variables and provides empirical evidence on how these factors shape income gaps through their impact on market integration.
The findings of this paper have clear policy implications. To enhance the internet’s role in promoting equitable income distribution and resource allocation across regions, policymakers should not only continue expanding internet access but also leverage the spillover effects of digital attention to foster regional integration. First, mainstream media should play a stronger role in promoting “supportive” attention flows from high-income to low-income cities to help narrow regional income gaps. Second, policymakers should remove administrative and economic barriers to regional integration, ensuring that digital networks are seamlessly integrated with broader economic and social systems. This would enhance resource allocation efficiency and contribute to common prosperity. Finally, policymakers should prioritize rural internet infrastructure as a key pillar of the rural revitalization strategy. Strengthening rural internet connectivity can amplify the role of internet attention in narrowing rural income gaps and fostering inclusive economic growth.
Based on these findings, future research may incorporate both institutional and non-institutional frictions. Institutional segmentation influences transaction costs through formal and informal institutional factors. Formal institutions often take the form of administrative barriers, reinforcing boundary effects, while informal institutions reflect the role of cultural similarities in shaping regional interactions. A promising direction for future research is to examine the extent to which information networks can mitigate regional administrative barriers and cultural distance, thereby facilitating economic activities across regions.

【KeyWords】

Internet Attention, Income Gaps, Domestic Migration, Domestic Trade, Capital Flow