Identifying impacts of industrial co-agglomeration on carbon emissions: Evidence from China

Based on panel data of 285 cities in China at the prefecture level and above from 2005 to 2020, this paper aims to study the nexus between industrial co-agglomeration and carbon emissions from dual perspectives including space and time. It adopts multiple approaches including a dynamic general method of moment, panel quantile regression model, panel threshold model, and dynamic spatial Durbin model. The non-spatial empirical results support the establishment of the threshold effect and the imbalance effect. The spatial empirical results indicate that industrial co-agglomeration poses a dramatic stimulating effect on urban carbon emissions, and its spatial spillover effect and spatial heterogeneity are conditionally established. Furthermore, heterogeneous effects are supported, such as the positive spillover effects of industrial co-agglomeration are more significant in western cities, resource-oriented cities, and non-low-carbon pilot cities. The heterogeneous influence of cost factors on industrial agglomeration and carbon emissions has also been partially confirmed. In terms of the channels and mechanism of action, the negative externalities of industrial co-agglomeration occupy a dominant position in the current status of economic development. The dynamic equilibrium between government intervention and marketization is a solid foundation for the optimization of carbon emission reduction paths.