Co-agglomeration of Manufacturing and Producer Services Industry and Pollution Emission

——A Panel Data Analysis of China’s 285 Cities

China Business and Market - - CHINA BUSINESS MARKET -

HUANG Juan1 and WANG Ming-jin2

(1.Collaborative Innovation Center for China Economy,Tianjin300071,China;2.Shaoxing Regional Center for Economic

Research,Shaoxing,Zhejiang312000,China)

Abstract:Based on the inverted U- shaped curve hypothesis of relation between agglomeration and pollution,the authors explore the effect of manufacturing agglomeration,co- agglomeration of manufacturing and producer services industry on pollution emission with a panel data of China’s 285 cities from 2004 to 2014. Then the authors make the empirical analysis with the two- way fixed effects using the divided sample based on regional characteristic and population size characteristic. The results imply that manufacturing agglomeration and co-agglomeration of manufacturing and producer services industry both have an inverted U- shaped relation with pollution emissions. With the development of agglomeration,agglomeration may have a negative effect on pollution emission after the level of city agglomeration steps over the "inflection point". Innovation can significantly reduce pollution emissions, and plays an important role on the inverted U- shaped relationship between agglomeration and pollution emissions. After considering region and size factors,the effect of manufacturing agglomeration and co- agglomeration of manufacturing and producer services industry on pollution emissions has obvious characteristics about location,structure and scales.

Key words:manufacturing agglomeration;co- agglomeration;pollution emission;inverted U-shaped curve;fixed effects model

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