![]() A “relative environmental damage index” (REDI) was used to measure the regional environmental damages, and the Hirschman–Herfindahl Index was selected as the indicator of the regional industrial agglomeration levels.Ĭhina was chosen as the research subject since it is the world’s largest developing country with major problems regarding land and water usage. ![]() To be more specific, this study adopted a “relative resource shortage index” (RRSI) to evaluate regional resource shortages, which contained the two resource variables of water and soil, and had the ability to indirectly measure resource security. Then, from an empirical perspective, this study focused on exploring the impacts of resource scarcity and environmental pollution on industrial agglomerations in different provinces in China. Therefore, from a theoretical standpoint, this study built an equilibrium model which included industrial agglomeration and variables regarding water, soil, and pollution, for the purpose of analyzing how resource and environmental factors affect industrial agglomeration. The results illustrated how valuable a healthy ecosystem can be to regional economic development. In the current study, the restraining effects of resource shortages and environmental damages on industrial agglomeration were analyzed. However, the existing research in this field has focused more attention on how industrial agglomeration affects the environment but has seldom paid attention to how environmental damage affects industrial agglomeration. Above all, such negative changes may in turn generate negative impacts on industrial agglomeration. However, when exceeding certain thresholds, the negative ecological changes resulting from human economic activities may lead to resource depletion and environmental degradation, making economic development unsustainable. Globally speaking, resource scarcity and environmental pollution are widespread phenomena that occur during industrialization and urbanization processes. The combined effects of urbanization and industrial agglomeration have contributed to China’s high economic growth over the past several decades. ![]() In 2019, the urbanization rate of China’s resident population reached a milestone level of 60.6%, which was equivalent to the global upper-middle level. In 2014, the Central Committee of the Communist Party of China (CPC) and the State Council issued the “National Plan on New Urbanization (2014 to 2020)”, which aims to convert the rural population into urban residents in an orderly manner. Urbanization and industrial agglomerations together have become the key strategies for regional economic development in China. Along with industrial agglomeration, urbanization has taken place in China at a speed and on a scale that has been faster and larger than any urbanization process in the modern history of industrialized countries in the world. This process has led to unprecedented speed in spatial agglomerations across industries within China. With the reform of the labor market, the Hukou System, and social welfare systems, essential resources and factors of production can now flow across different regions and sectors, pursuing higher levels of allocation efficiency. Over the past 40 years, China’s regional development strategy has changed from central-planed to market-driven, and from a balanced regional development mode to a differentiated regional development mode. ![]() ![]() The negative effects were observed to significantly increase with levels of local government competition, but did not vary with the regional market segmentation. The results showed that water and soil scarcity and environmental pollution have negative effects on industrial agglomeration. In addition, this study also used Hausman statistical tests and Fisher–PP unit root tests to analyze the endogenous problems and robustness of the model, respectively. The model estimated its parameters with OLS in order to analyze how the mechanisms of industrial agglomeration are affected by resource security and environmental factors. In the present study, an individual fixed-effect model was constructed based on the framework of the new economic geography and the provincial-level data of China. On the other hand, the environmental problems resulting from human economic activities can impose new constraints on industrial agglomeration, making economic development unsustainable. On one hand, rapid economic growth has led to increasing environmental problems. Water and soil scarcity and pollution have become more severe problems in China in recent years. ![]()
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