Towards achieving the sustainable development goal of industry: How does industrial agglomeration affect air pollution?

Industrial agglomeration not only brings economic prosperity, but also raises concerns about its environmental impact. How to balance industrial agglomeration and inclusive economic growth is a major challenge for today's social development. On the foundation of the balanced panel data of 164 cities in China from 2003 to 2013, our study employs the dynamic spatial Dubin model to empirically analyze the possible spatial effects between industrial agglomeration and air pollution at China's urban level, and detects the potential transmission mechanism through the lens of environmental regulation, technological progress and industrial structure upgrading. The findings denote that: (1) An inverted “N" type relationship exists between industrial agglomeration and air pollution, namely, with the deepening of industrial agglomeration, the air pollution of the city will first decline, then rise, and finally recover the trend of decline. (2) The influence of local industrial agglomeration on neighbor air pollution also presents an inverted “N" shape, denoting that local industrial agglomeration also has an alleviating influence on air pollution in adjacent regions in the long run. (3) Industrial agglomeration can reduce the air pollution level in urban agglomeration by affecting environmental regulation, technological progress and industrial structure upgrading. These results provide a detailed reference for promoting industrial development and air pollution control.