Transformations in
Business & Economics
- © Vilnius University, 2002-2019
- © Brno University of Technology, 2002-2019
- © University of Latvia, 2002-2019
Article
MANUFACTURING AGGLOMERATION AND ENVIRONMENTAL EFFICIENCY IN CHINA: INSIGHTS FROM THE PANEL THRESHOLD MODEL
Zhiying Ji, Pengyu Li, Xiaosong Zheng
ABSTRACT. This paper examines the relationship between manufacturing agglomeration and environmental efficiency in China based on a sample of 283 prefecture-level cities during 2003-2012 using a non-dynamic panel threshold model. First, we calculated the environmental efficiency scores for two pollutants respectively based on the SBM-DEA method.
Secondly, a non-dynamic panel threshold model based on Hansen (1999) was employed to investigate the impact of manufacturing agglomeration on environmental efficiency. Our analysis reveals that there is a non-linear relationship between manufacturing agglomeration and environmental efficiency. The intensity of science and technology expenditure and human capital stock are important threshold variables. Also, economic development, urbanization and government environmental regulation to a certain extent contribute to the rise of environmental efficiency. Finally, conclusions are made together with an outline of some policy implications for more sustainable development.
KEYWORDS: manufacturing agglomeration, environmental efficiency, panel threshold model, SBM-DEA method.
JEL classification: Q51, Q56, O13.