Industrial collaborative agglomeration, marketization, and green innovation: Evidence from China’s provincial panel data

Abstract

The growth effect of collaborative agglomeration of manufacturing and producer service industries is receiving increasing attention from scholars. However, few studies have explored whether and how collaborative agglomeration of manufacturing and producer service industries affects green innovation. To bridge this gap, using the methods of the system generalized method of moments, the moderating effect, and the threshold effect, and employing the panel data of 30 provinces of China for 2003–2017, this paper studies the effect of industrial collaborative agglomeration on green innovation and how this influence fluctuates when marketization is included. The main findings are as follows: (1) During the sample period, industrial collaborative agglomeration generally had a blocking effect on China’s green innovation. A 1% increase in industrial collaborative agglomeration indicated a 0.461% decrease in green innovation efficiency. (2) Marketization can be an essential and efficient factor to correct the negative impact of industrial collaborative agglomeration through a moderating effect. (3) With the improvement of marketization, industrial collaborative agglomeration exhibits a U-shaped effect on green innovation, with the turning point occurring when the marketization index is 6.21. (4) As of 2017, 21 provinces have successfully exceeded the threshold of marketization, indicating that the current industrial collaborative agglomeration has been able to effectively improve China’s green innovation efficiency. However, the other nine provinces still trail behind them in marketization reforms, with industrial collaborative agglomeration continuing to negatively affect green innovation. (5) This paper concludes with recommendations to improve green innovation through industrial collaborative agglomeration and market reform.