Abstract: The mutual determination of demand and supply implies that the level of roundabout production determines the level of productivity and the income level, thus determines the level of common prosperity, and the market size determined by the degree of common prosperity in turn determines the level of roundabout production. Based on the data of Chinese cities from 2003 to 2014, this paper conducts an empirical study by integrating common prosperity into the Smith-Younger theorem. The findings show that, firstly, the improvement of the urban roundabout production brought about by the increase in the length of the production chain has a great promoting effect on the realization of urban-rural common prosperity. Secondly, in the process of the urban roundabout production promoting the urban-rural common prosperity, the urban roundabout production has a greater improving effect on the income growth of rural residents, thus effectively avoids the fast expansion of the urban-rural income gap; besides, the urban roundabout production also promotes the urban-rural common prosperity through the promotion of the growth of total factor productivity. Thirdly, by examining the impact of the trend of the urban roundabout production, namely, the deepening of the division of labor, it is found that the embedding in global division of labor can not only promote the improvement of the degree of urban prosperity, but also effectively narrow the urban-rural income gap. The above results indicate that, to realize the urban-rural common prosperity from the perspective of division of labor, it is necessary to accelerate the integration of cities into the production chain for the coordinated division of labor, especially to maintain high-level opening-up and participate in the global division of labor.

Key words: urban roundabout production, common prosperity, urban-rural income gap, production chain