Does industrial agglomeration promote or hinder environmental governance: evidence from a quasi-experiment on the establishment of development zones

WANG Bing1 NIE Xin1

(1.School of Economics of Jinan University, Guangzhou , China 510632)

【Abstract】Theoretically, the positive externalities of industrial agglomeration should be far greater than its negative externalities on environment. However, from a realistic point of view, industrial agglomeration seems to be accompanied by river pollution, smog and other environmental issues. Faced with the gap of theory and reality, we cannot help to ask whether industrial agglomeration promotes or hinders environmental governance. The existing literature not only failed to reach a consensus, but most of the research perspective stay in the city, industry and other macro level, there is little research on the micro mechanism of the above relationship. As China’s most typical industrial agglomeration areas, the development zones provide a good perspective to clarify the above issues. In this paper, the influence of industrial agglomeration on water environment is studied by using a quasi-experiment based on the accurate geographic information of the river water quality observation points and the development zones. It is found that after the establishment of the development zone, river water has deteriorated significantly, and BOD, ammonia and other pollutants are significantly increased. Further research using industrial enterprises’ database shows that after the establishment of the development zone, the enterprise scale expanded, and the new entrants are the main reason. The results of this paper show that industrial agglomeration can hinder environmental governance, and the environmental pollution is more and more embodied in concentrated emission of pollution enterprises in space. And strict control of new capacity in the heavy pollution industry, especially strict access conditions for new enterprises, is the effective way to solve the problem of environmental pollution. In this paper, we create a new perspective to explain the deterioration of the environment caused by industrial agglomeration, and provide a clear policy reference to achieve win-win development of agglomeration and ecological environment.

【Keywords】 industrial agglomeration; water pollution; development zones; difference in differences;

【DOI】

【Funds】 Surface Project of the National Natural Science Foundation of China (714731052) New Century Talent Support Program of the Ministry of Education (NCET-110856)

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(Translated by JIN Ruihuan)

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