Polluting Industry Agglomeration, Environmental Regulation, and Urban Air Quality

Hanna Li and Yu Chen ()
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Hanna Li: School of Economics and Management, Zhengzhou University of Light Industry, Zhengzhou 450001, China
Yu Chen: School of Economics and Management, Zhengzhou University of Light Industry, Zhengzhou 450001, China

Sustainability, 2025, vol. 17, issue 4, 1-21

Abstract: In China, with the increasing emphasis on the concept of green sustainable development, polluting industries characterized by pollution and high energy consumption are facing unprecedented challenges. The development of the intermediate demand-type characteristics of polluting industries should be more reasonably laid out and regulated. In this paper, environmental regulation and environmental quality are introduced into the new economic geography model. On the basis of theoretical analysis, the IV regression method was used to study the interaction between polluting industry agglomeration, environmental regulation, and their effects on urban air quality with key cities as research objects. The results show that an increase in the agglomeration of polluting industries leads to significant deterioration in urban air quality and that this effect is linear, whereas an increase in the intensity of environmental regulation significantly dampens this effect. Each 1% increase in the intensity of environmental regulation results in a 1.17% reduction in air pollution. Therefore, to effectively protect the environment, the development of polluting industries should be relatively decentralized. Additionally, city governments should fully consider their urban eco-geographical characteristics, directly reduce and indirectly inhibit the degree of agglomeration of polluting industries and simultaneously strengthen the intensity of environmental regulation.

Keywords: polluting industry agglomeration; environmental regulation; air quality; IV regression (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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