The effects of industrial agglomeration on ecological efficiency in China: evidence from manufacturing industry panel data

Abstract

Since 2014, China’s economy has transitioned from rapid growth to the new normal, and the challenges of resource shortages and environmental pollution remain prominent. Therefore, China’s contemporary economic development objective is no longer to pursue high-speed growth alone but to achieve high-quality development. Green development is an internal requirement and a crucial choice for high-quality economic development. As the most distinctive and universal geographical distribution feature of economic activities, industrial agglomeration has a broad and profound impact on industrial and regional economies and the advancement of green development. This study examines 27 manufacturing industries in China to investigate the influence of agglomeration on industrial ecological efficiency. First, we empirically tested this influence from an overall perspective. We then divide manufacturing industries into technology-, capital-, resource-, and labor-intensive industries. This study constructs linear regression and threshold models to empirically analyze the divergence in influence effects among the four types of industries. The results reveal that the average influence of the manufacturing industrial agglomeration on industrial ecological efficiency is an inverted N-shaped threshold effect. Notably, the agglomeration of technology-intensive industries significantly promotes ecological efficiency. By contrast, resource-intensive industry agglomeration exhibits a restraining effect. Finally, labor- and capital-intensive industry agglomerations present prominent threshold effects, revealing inverted N-shaped and U-shaped nonlinear relationships, respectively. The conclusions of this research can serve as a reference for the policy formulation of green industrial development in China and other transitional economies.