Hindrance or facilitator? The economic consequences of national demonstration eco-industrial parks in China

Abstract

Many countries attach great importance to the green, low-carbon, and circular development of industrial parks. China is one of them and has entered an exploration journey of national demonstration eco-industrial parks (NDEIPs). However, the impact of the transformation of industrial parks into NDEIPs on local economic development still remains a mystery. To address this issue, we develop an empirical study using a combination of the multi-period difference-in-differences method and the propensity score matching method based on the panel data for 266 cities in China from 2001 to 2021. The results show that industrial parks becoming NDEIPs promotes cities' economic development. This conclusion still holds after a series of robustness tests, such as the reverse causality test and the placebo test. Moreover, the park heterogeneity tests show that the economic consequences vary according to differences in levels, industry types, life cycle phases, and the degree of foreign firm agglomeration. The city heterogeneity tests show that the economic consequences differ based on administrative levels, innovation capabilities, technology industrialization, and environmental friendliness. The spatial heterogeneity tests show that the economic consequences differ according to geographical location and whether situated in the Yangtze River Economic Belt. The policy upgrading heterogeneity tests show that the economic consequences differ during the process of policy upgrading and transformation. In addition, the mechanism tests reveal that green innovation, human capital level, and firm attractiveness mediate the relationship between industrial parks becoming NDEIPs and cities' economic development. This study provides a new perspective for understanding the economic effects of the transformation of industrial parks into NDEIPs, and provides a reference for the government on how to maximize these economic effects.

Keywords: Ecological requirements; Economic development; Heterogeneity; Mechanism; National demonstration eco-industrial parks; Preferential policies.