Abstract: The high-quality development of regional economy is inseparable from the efficient utilization of capital factors. Based on the panel data of 284 prefecture level cities in China from 2003 to 2017, taking the two capacity expansion of the "Yangtze River Delta Urban Economic Coordination Committee" as the quasi natural experiment, this paper uses the generalized synthetic control method and the DID method to verify the impact of the capacity expansion of regional integration on the efficiency of capital allocation. The results show that: (1) capacity expansion improves the efficiency of regional capital allocation, and the improvement effect increases with time（2) The effect of capacity expansion on the capital allocation efficiency of new peripheral cities is less than that of original central cities（3) The expansion has improved the capital allocation efficiency of new peripheral cities in Anhui and Jiangsu, but it has no obvious effect on new peripheral cities in Zhejiang. This paper also further tests the mechanism of regional integration capacity expansion to improve the efficiency of capital allocation. The results show that capacity expansion can improve the efficiency of capital allocation through three action mechanisms: "breaking the flow barrier", "improving the industrial division of labor" and "improving the level of regional finance".
