Can industrial agglomeration achieve the emission-reduction effect?

Abstract This paper adopted the Meta-constraints efficiency model to measure the environmental efficiency of the industry in China, and then used the spatial panel model to analyze the impact of industrial agglomeration externalities on environmental efficiency. The study found that industrial agglomeration exerted an apparent spatial spillover effect. Different agglomeration degrees and means may be matched with different environmental effects. With the evolution of agglomeration, the balanced effects among negative externality of scale (pollution effect). Marshallian and Jacobs positive externality (self-purification effect) lead to a U-curved tendency between industrial agglomeration and environmental efficiency. Therefore, with the increase of industrial agglomeration degree, the environmental efficiency first decreases and then increases. The effect of industrial agglomeration in the Midwest on the environment is mainly presented as a negative externality of scale, situated in the descending phase of the U curve. However, the effect of eastern industrial agglomeration on the environment mainly manifested as Marshallian and Jacobs positive externalities and was situated close to the ascending phase of the U curve. All regions should fully utilize the “self-purification” effect of the Marshallian externality and the Jacobs externality on emission-reduction according to the different phases of industrial development.