Unpacking the Development Mechanism of Characteristic Towns in China: The Interactive Roles of Government Legitimization and Local Capacity

This study addresses a critical gap in research on characteristic towns in China: the neglect of their role as facilitators of diversified urban–rural development and the limited attention to the interplay between governmental decision-making and local agency. To fill this gap, the study conceptualizes legitimization as the process through which local capacity is incorporated into government decision-making, situated within the broader continuum of multi-level urban–rural governance. Empirically, the analysis examines two key relationships. First, it evaluates the existence and magnitude of legitimization by testing the extent to which government decisions are influenced by local capacity, defined in terms of urban–rural relations and regional industrial agglomeration. The results demonstrate that when government decision-making is primarily explained by local capacity, it can be approximated as legitimization. Second, the study investigates whether both local capacity and legitimization shape the operation of characteristic towns, and whether legitimization functions as a mediating or moderating mechanism in this relationship. In total, the study explores the spatial heterogeneity of these relationships using geographically weighted regression, highlighting how legitimization varies across regions. The findings confirm that legitimization plays a dual role as both mediator and moderator, thereby advancing theoretical and empirical understanding of how government legitimization influences the differentiated development of characteristic towns.