Abstract
Haze pollution in China is a serious environmental issue, which does harm both to people’s health and to economic development. Simultaneously, as an important industrial development law, agglomeration may result in the increased concentration of manufacturing firms and, consequently, an increase in haze pollution. However, the positive externalities of agglomeration can also improve the efficiency of regional innovation, which curbs haze pollution. In this paper, we construct both theoretical and empirical models to investigate the effects of industrial manufacturing agglomeration on haze pollution. The results reveal the following: (1) By incorporating the effect of agglomeration and haze pollution into a general endogenous growth model, we show an inverted-U relationship between agglomeration and haze pollution on the balance growth path. (2) Based on data concerning haze pollution (PM2.5) and data from 285 Chinese cities, the empirical results verify the findings of the theoretical model. Further, we calculated the values of agglomeration variables, with respect to the inflection points of the inverted-U, which the cities need to reach in order to gain the specific agglomeration values required to enjoy the inhibition effect of agglomeration on haze pollution. (3) A heterogeneity analysis shows that the inverted-U relationship is more obvious among the cities in the middle and northeastern areas of China, as well as medium-size cities. (4) Cities’ environmental regulation policies and high-quality institutional environments can restrain the positive effect of agglomeration on haze pollution. (5) Using three measures of innovation, it is also empirically found that innovation is the mechanism (mediator) between agglomeration and haze pollution.
Highlights
With the development of urbanization and industrialization, the effect of haze pollution is becoming worse in China
We develop an endogenous growth model that describes the relationship between agglomeration and haze pollution
We study how industrial agglomeration affects haze pollution by constructing an endogenous growth model and conducting an empirical analysis
Summary
With the development of urbanization and industrialization, the effect of haze pollution is becoming worse in China. Haze pollution is more frequent and difficult to control than ever before. According to the China Air Quality Monitoring Platform [1], megalopolises, e.g., the Beijing-Tianjin-Hebei Regions, Yangtze River Delta Region and Pearl River Delta, suffered from haze pollution for over 100 days during 2015. The Chinese government pays close attention to this problem. The ‘Plan for the Prevention and Control of Air Pollution’ was issued by the Chinese government in 2013, which set targets and plans to prevent and control the haze pollution. According to the Meteorological Bulletin of the Atmospheric Environment (2018 edition) [2], in China, the average concentration of PM2.5 was
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