The heterogeneous effects of Chinese industrial parks on environmental pollution

As a form of regional agglomeration, industrial parks create huge benefits for China's economic development, but they also generate considerable environmental externalities and are expected to become the breakthrough to achieve green transformation. This study builds a panel data set by combining a variety of data on the environmental and economic characteristics of firms, industrial parks, and regions, and empirically investigates the effects of establishing industrial parks on emissions of COD, NH3, SO2, and dust. We find such effects are heterogeneous across scales of investigation and types of industrial parks. After entering the industrial parks, firms can reduce their environmental pollution, and the emissions of COD, SO2 and dust have decreased by 9.3 %, 13.4 % and 4.6 %, respectively. However, the study at the regional level finds that, after the establishment of industrial parks, the overall emissions of COD, NH3, SO2, and dust have increased by 37.9 %, 365 %, 45.5 % and 34.9 %, respectively. The expansion of production scale and the increase of pollution-intensive industries are the main factors that cause more serious regional pollution. Meanwhile, the improvement of pollution treatment is very limited. After the establishment of a new park, the emission intensities of newly entered firms are higher than those of pre-existing firms, indicating industrial parks may lower environmental requirements in exchange for economic growth. Parks with clean dominant industries, high levels of water reuse and technical innovation tend to emit less pollutants. Based on the results, this study gives four suggestions for establishing environment-friendly industrial parks, that is, to plan the industrial layout rationally, to speed up the construction of pollution treatment facilities, to increase the environmental threshold for entrance, and to promote technical innovation.

Automated summary

As a regional agglomeration, industrial parks in China bring huge benefits to economic development, but they also result in significant environmental externalities. This study empirically investigates the effects of establishing industrial parks on emissions of various pollutants like COD, NH3, SO2, and dust, and finds that the effects vary across different scales and types of industrial parks. While firms within industrial parks are able to reduce their environmental pollution, the overall emissions in the regions where the parks are located tend to increase, mainly due to the expansion of production scale and the increase of pollution-intensive industries. The study suggests the establishment of environmentally-friendly industrial parks by rational industrial layout planning, construction of pollution treatment facilities, raising environmental thresholds for entry, and promoting technological innovation.