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The Impact of the Dynamics of Agglomeration Externalities on Air Pollution: Evidence from Urban Panel Data in China

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  • Xiaolan Tan

    (School of Public Administration, Hohai University, Nanjing 211100, China)

  • Wentao Yu

    (School of Economics and Management, Fuzhou University, Fuzhou 350116, China)

  • Shiwei Wu

    (School of Economics and Management, Fuzhou University, Fuzhou 350116, China)

Abstract

Air pollution in China has become a matter of increasing public concern. In this paper, we attempted to build a theoretical model to explore the impact of the dynamics of agglomeration externalities on haze pollution in urban China, where agglomeration is differentiated by regional specialization and geographical concentration. Based on China’s panel data for 289 cities during the period of 1998–2018, the empirical result shows that the relationship between industrial agglomeration and urban haze pollution is not simply linear or of an inversed U-type but turns out to be dynamically N-shaped. To be specific, the increase in local haze pollution can be explained by agglomeration externalities in the beginning stage, whereas the reducing effect only occurs during the mature stage. The heterogeneity test indicated that the effect of the type of agglomeration on haze pollution seems to be mixed in different groups of cities, but is still consistent with the hypothesis of the dynamic change of agglomeration externalities. The results are found to be quite robust and consistent after replacing variables and using other regression methods. This paper provides answers to the question of how to coordinate the relationship between developing industry parks and air pollution in terms of the life cycle of agglomeration as well as the types of city.

Suggested Citation

  • Xiaolan Tan & Wentao Yu & Shiwei Wu, 2022. "The Impact of the Dynamics of Agglomeration Externalities on Air Pollution: Evidence from Urban Panel Data in China," Sustainability, MDPI, vol. 14(1), pages 1-22, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:1:p:580-:d:718377
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    References listed on IDEAS

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    1. C. Cindy Fan & Allen J. Scott, 2003. "Industrial Agglomeration and Development: A Survey of Spatial Economic Issues in East Asia and a Statistical Analysis of Chinese Regions," Economic Geography, Taylor & Francis Journals, vol. 79(3), pages 295-319, July.
    2. Wolde-Rufael, Yemane & Idowu, Samuel, 2017. "Income distribution and CO2 emission: A comparative analysis for China and India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1336-1345.
    3. Fan, Maoyong & He, Guojun & Zhou, Maigeng, 2020. "The winter choke: Coal-Fired heating, air pollution, and mortality in China," Journal of Health Economics, Elsevier, vol. 71(C).
    4. Hu, Cui & Xu, Zhaoyuan & Yashiro, Naomitsu, 2015. "Agglomeration and productivity in China: Firm level evidence," China Economic Review, Elsevier, vol. 33(C), pages 50-66.
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    Cited by:

    1. Hao, Yu & Guo, Yunxia & Li, Suixin & Luo, Shiyue & Jiang, Xueting & Shen, Zhiyang & Wu, Haitao, 2022. "Towards achieving the sustainable development goal of industry: How does industrial agglomeration affect air pollution?," Innovation and Green Development, Elsevier, vol. 1(1).
    2. Zhipeng Gao & Zhenyu Wang & Mi Zhou, 2023. "Is China’s Urbanization Inclusive?—Comparative Research Based on Machine Learning Algorithms," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    3. Yuting Xue & Kai Liu, 2022. "Regional Differences, Distribution Dynamics, and Convergence of Air Quality in Urban Agglomerations in China," Sustainability, MDPI, vol. 14(12), pages 1-20, June.
    4. Wang, Jianda & Guo, Dongsheng, 2023. "Siphon and radiation effects of ICT agglomeration on green total factor productivity: Evidence from a spatial Durbin model," Energy Economics, Elsevier, vol. 126(C).
    5. Xu Dong & Yang Chen & Qinqin Zhuang & Yali Yang & Xiaomeng Zhao, 2022. "Agglomeration of Productive Services, Industrial Structure Upgrading and Green Total Factor Productivity: An Empirical Analysis Based on 68 Prefectural-Level-and-Above Cities in the Yellow River Basin," IJERPH, MDPI, vol. 19(18), pages 1-19, September.
    6. Hanna Li & Yu Chen, 2025. "Polluting Industry Agglomeration, Environmental Regulation, and Urban Air Quality," Sustainability, MDPI, vol. 17(4), pages 1-21, February.
    7. Zhiying Cao & Liangjian Wang & Yang Zhang, 2022. "Environmental Effects of City–County Mergers in China: Strengthening Governance or Aggravating Pollution?," Sustainability, MDPI, vol. 14(9), pages 1-20, May.

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