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How does producer services’ agglomeration promote carbon reduction?: The case of China

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  • Zhao, Jun
  • Dong, Xiucheng
  • Dong, Kangyin

Abstract

This study tests how producer services' agglomeration (PSA) affects carbon dioxide (CO2) emissions in China by using balanced panel data of China's 30 provinces from 2003 to 2017 to analyze the three effects (i.e., scale, technique, and composition) of PSA on CO2 emissions. Furthermore, by dividing China's 30 provinces into three regions, we further explore the potential regional heterogeneity in the effects between these two variables. The empirical results indicate that an increase in PSA can effectively mitigate the greenhouse effect in China. PSA increases CO2 emissions by improving economic scale; however, strengthening technology and knowledge spillover effects and optimizing industrial structure can alleviate CO2 emissions. Although PSA helps reduce CO2 emissions in all three regions, we find significant regional heterogeneity. Our results imply that promoting the development of the producer services industry is essential to accelerate the realization of “carbon neutrality.”

Suggested Citation

  • Zhao, Jun & Dong, Xiucheng & Dong, Kangyin, 2021. "How does producer services’ agglomeration promote carbon reduction?: The case of China," Economic Modelling, Elsevier, vol. 104(C).
    • Handle: RePEc:eee:ecmode:v:104:y:2021:i:c:s0264999321002133
    DOI: 10.1016/j.econmod.2021.105624
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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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