Threshold Effect of Manufacturing Agglomeration on Eco-Efficiency in the Yellow River Basin of China

Research on the impact of industrial development on the ecological environment of the Yellow River Basin plays a significant role in accelerating the high-quality development of that key region of China. Since the impact of industrial agglomeration on eco-efficiency is very complex, this study constructs a panel threshold model of the impact of manufacturing agglomeration on eco-efficiency and analyzes the heterogeneity of different industries. The results led to the following conclusions: The optimal range for the industrial agglomeration level is 0.37 to 0.40. When the industrial agglomeration level is in that optimal range, the manufacturing agglomeration has a significant positive effect on eco-efficiency, and the eco-efficiency level increases by 2.87% for every 1% increase in the agglomeration level. The agglomeration of high-energy-consuming manufacturing has obvious negative externalities for eco-efficiency; however, this negative effect weakens after the threshold value is reached. However, the impact of the agglomeration of low- and medium-energy-consuming manufacturing industries on eco-efficiency is manifested as a significant positive effect, though when the agglomeration degree is low, the effect is not significant.

Automated summary

This study investigates the impact of manufacturing agglomeration on eco-efficiency in the Yellow River Basin, and finds that there is a threshold level for the optimal range of industrial agglomeration. High-energy-consuming manufacturing agglomeration has negative externalities for eco-efficiency, but this negative effect weakens after reaching a certain threshold. On the other hand, the agglomeration of low- and medium-energy-consuming manufacturing industries has a significant positive effect on eco-efficiency, though the effect is not significant when the agglomeration degree is low.