Abstract:The ecological environment quality in the Yangtze River Economic Belt has been generally improved, but regional and local air pollution remain prominent. Market segmentation is the deep institutional cause of pollution. Eliminating market barriers and accelerating regional integration are important ways to achieve green development. However, the existing literature on the relationship between the domestic market system and environmental quality is still insufficient. This paper argues that regional market integration is conducive to improving air quality. It analyzes the influence mechanism of market integration on air quality from scale effect, structural transformation effect, and technological progress effect. This paper also considers that environmental regulation and environmental performance appraisal can strengthen the effect of market integration on urban air quality. Taking 101 prefecture-level and above cities in the Yangtze River Economic Belt as a sample, this paper applies the price method to characterize the market integration of sample cities and uses the panel data model and intermediary effect model to empirically test the impact of the market integration on air quality and its mechanism, as well as the regulatory role of government policy. The results show that the improvement of market integration significantly improves air quality along the Yangtze River Economic Belt, which is still supported by the robustness test, and the extent of the impact is regionally differentiated. Market integration has a stronger impact on urban air quality in the downstream than in the upstream and midstream. Market integration improves urban air quality by strengthening the scale effect, accelerating industrial structure upgrading, and promoting technological progress. Environmental regulation and environmental performance appraisal, combined with market integration, can play a positive regulatory role in improving air quality. Strict environmental regulation and environmental performance appraisal have a relatively large regulatory effect on downstream areas. Compared with existing literature, this paper mainly expands and deepens this study from the following aspects. First, the institutional causes and their mechanisms affecting air quality are analyzed in depth from the perspective of domestic market integration. Second, cities at or above the prefecture level in the Yangtze River Economic Belt are taken as samples to provide empirical evidence for market integration to improve air quality. Third, the policy combination effects of environmental regulation, environmental performance assessment and market integration are empirically examined based on the government policy level. To a certain extent, the research in this paper clarifies the internal mechanism of regional market integration affecting air quality, which will provide a scientific basis for effective evaluation of the market system and mechanism construction, and also provide theoretical support for better practicing new development concepts, constructing new development patterns, and advancing high-quality development. The findings of this paper have important policy implications for further promoting market integration reform and realizing green development. We should continue to promote the construction of a unified and open regional market, improve the regional cooperation mechanism, accelerate the establishment of a unified factor market, implement a unified market access system, and form market integration across a wide range of regions in the Yangtze River Economic Belt, while strictly implementing environmental regulation policy and establishing the green performance appraisal system.