Firm clustering, agglomeration externalities and energy efficiency: Evidence from chinese industrial enterprises

In the context of rapid industrialization and transition to a low-carbon economy, it is of great practical significance to clarify the intrinsic connection between industrial agglomeration and energy utilization efficiency. This study builds on the theory of relational economic geography to conceptualize clustering as the geographic concentration of enterprises' horizontal and vertical linkages within the value chain. We investigate the effects of firm clustering on enterprise energy efficiency from a micro perspective. The results indicate that specialized agglomeration and coagglomeration significantly enhance enterprises' energy efficiency, influenced by the geographic concentration and input-output correlation. Moreover, we analyze how clustering improves energy efficiency through three mechanisms: knowledge spillovers, energy input allocation, and productivity improvement, in terms of Marshallian agglomeration externalities. These findings enrich the literature on environmental externalities of industrial agglomeration and provide some insightful references for policymakers.