On industrial agglomeration and industrial carbon productivity --- impact mechanism and nonlinear relationship

Abstract

This study focuses on examining the mechanisms of industrial agglomeration on industrial carbon productivity. A balanced panel dataset of 281 cities in China is used, covering the period from 2004 to 2020, to assess the combined economic and environmental effects of industrial agglomeration. The main research findings are: (1) Industrial agglomeration significantly raises industrial carbon productivity; (2) Industrial agglomeration indirectly increases industrial carbon productivity through technological progress and labor mismatch reduction; (3) Environmental regulations have a negative moderating role in the correlation between industrial agglomeration and industrial carbon productivity; (4) The relationship between industrial agglomeration and industrial carbon productivity is non-linear. One of the possible reasons for the non-linear relationship between industrial agglomeration and industrial carbon productivity is that the level of industrial agglomeration is too high and its effect on promoting technological progress is not significant. The innovation of this paper is that it focuses on the industrial sector, quantifies the learning and matching effects of industrial agglomeration, empirically analyzes how industrial agglomeration affects industrial carbon productivity, and explores the reasons for the nonlinear relationship between industrial agglomeration and industrial carbon productivity. These findings are valuable in guiding the industrial sector on improving industrial carbon productivity through agglomeration effects.