How industrial agglomeration and technological innovation affect carbon emission efficiency: Evidence from China

Despite growing attention to the nonlinear effect of industrial agglomeration on carbon emission efficiency, the critical role of technological innovation as a threshold variable in shaping the nonlinear dynamic remains underexplored. Herein, revealing the influence of industrial agglomeration on carbon emission efficiency in 30 provinces spanning 2006 to 2019 using a spatial Durbin model (SDM). Regional and industrial heterogeneities are also further discussed. Subsequently, the threshold role of technological innovation in the relationship between carbon emission efficiency and industrial agglomeration was tested by adopting a threshold panel model. The results showed: (1) A significant inverted “U-shaped” relationship was found to exist between industrial agglomeration and carbon emission efficiency. (2) The eastern region had a greater industrial agglomeration inflection point than the central and western regions. Capital and technology-intensive industries had more sustainable agglomeration advantages than resource-intensive and labor-intensive industries. (3) With the further development of technological innovation (TEC>0.067), the positive influence of industrial agglomeration on carbon emission efficiency shifted from strong to weak. This study enables policymakers to leverage the technological innovation threshold as an actionable benchmark, strategically timing industrial agglomeration interventions to maximize decarbonization returns while avoiding scale-driven efficiency traps.