Abstract: Building a unified national market is an important task and foundation for the promotion of the domestic circulation.Promotinglocal governments cooperation and removing local protection is of great significance to promoting the new dual-cycle development pattern with the domestic cycle as the main body. Based on the quasi-natural experiment of the policyshock of the Yangtze River Delta Economic Coordination Commission, this paper conducts an empirical study bymaking use of the panel data of 41 prefecture level cities in the Yangtze River Delta region from 1994 to 2018.Thefindings show that the government cooperation has reduced resources misallocation by 26.7% on average.This policy effect of government cooperation on resource allocation begins to appear in the fourth year after joining the Coordination Commission, and it is persistent. Compared with the newly joined cities, the reducing effect is greater in the original cities than that in the newly joined cities.Thisimproving effect is significant in both large and medium-sized cities, while in the small cities, the improving effect is not significant.Theimproving effect of government cooperation on resource allocation in large cities is not as good as that in the medium-sized cities.The closer the distance to the corecities, the stronger the improving effect of government cooperation on resource allocation.The results of the mechanism analysis indicate that government cooperation can reduce resource misallocation by reducing market segmentation and promoting regional industrial division.

Key words: government cooperation, resources misallocation, market segmentation, industrial division, Yangtze River Delta Economic Coordination Commission