Abstract
Enterprise agglomeration provides significant economic benefits but also carries substantial environmental impacts. Using the China Industrial Enterprise Database, this research develops novel metrics to comprehensively quantify specialization and diversity within enterprise agglomeration patterns in the Chinese industry from 1998 to 2012. Meanwhile, this study also theoretically links levels of enterprise agglomeration to pollution levels by extending established models and testing these relationships empirically with emissions data from the period. The study finds that enterprise agglomeration has a "U-shaped" relationship with environmental pollution that is modified by factors like fossil fuel intensity and strength of environmental regulations. The conclusions suggest priorities for sustainable development include optimizing degrees of enterprise agglomeration and promoting energy efficiency and stricter standards to support long-term compatibility between economic clustering through enterprise agglomeration and environmental performance goals.
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