Abstract: Building a national unified market is the fundamental support and inherent requirement for constructing a new development pattern. Deepening local governments cooperation is an important means to break down local protectionism and market fragmentation. Taking the release of a series of regional integration development planning documents as a quasi-natural experiment, this study constructs a progressive difference-in-differences model to explore the impact of regional integration on capital cross-city flows as well as the underlying mechanism and economic consequences. The results show that regional integration significantly increases the probability, quantity proportion, and amount proportion of firms' cross-city M&As in the same region (referred to as intra-regional cross-city M&As). Mechanism analysis finds that after the enactment of regional integration policy, the political promotion probability of local officials is positively affected by the overall regional economic development and the economic development of other cities in the region. Moreover, the promoting effect of regional integration on firms' intra-regional cross-city M&As is stronger when local governments have a lower willingness to cooperate, indicating that strengthening local government cooperation is an important mechanism for regional integration to promote the flow of capital across cities. Economic consequence research shows that firms' intra-regional cross-city M&As in the context of regional integration can promote the economic development of the cities in the same region. In theory, this study expands the research on the economic consequences of China's regional integration and the influencing factors of capital cross-city flows. In practice, this study provides some empirical evidence and policy references for accelerating the construction of a national unified market and promoting common prosperity.

Key words: regional integration, capital cross-city flows, cross-city M&As, local government cooperation