Toward urban agglomerations’ sustainable development: Impact of economic agglomeration on green economic efficiency

Xiaowei Ma, Chuandong Li, Qing Li and Qingyu Sun

Economic Analysis and Policy, 2025, vol. 87, issue C, 1342-1360

Abstract: Green development plays a crucial role in China’s green transformation, offering new opportunities to foster sustainable development in urban agglomerations (UAs). Using panel data from 19 UAs between from 2005 to 2023, this study investigates the impact of economic agglomeration (EA) on green economic efficiency (GEE) and explores the mechanism of EA affecting GEE. The Herfindahl–Hirschman Index and the Epsilon-based measure model are employed to separately remeasure the EA and GEE. We also use the spatial Durbin model and two-stage least squares model to estimate the effects of EA on GEE. The relevant results are threefold. (1) The effects of EA on GEE show an inverted U-shaped relationship and this result withstands a battery of robustness tests. (2) EA has demonstration effects that can improve neighboring regions’ GEE. UAs’ EA promotes neighboring UAs’ GEE more obviously than local UAs. (3) EA can affect GEE through green technology innovation and infrastructure development, presenting an inverted U-shaped relationship. The findings offer new insights into understanding regional sustainable development and provide guidance and implications for governments to optimize EAs and promote green sustainable development. The results also provide valuable insights for other developing countries to formulate policies for green development.

Keywords: Economic agglomeration; Green economic efficiency; Urban agglomerations; Sustainable development (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:87:y:2025:i:c:p:1342-1360

DOI: 10.1016/j.eap.2025.07.013

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