Does Innovative Industrial Agglomeration Promote Environmentally-Friendly Development? Evidence from Chinese Prefecture-Level Cities
Round 1
Reviewer 1 Report
The paper is interesting and has important contributions. However, there are issues that the authors should address. It is my decision that the paper should be revised accordingly.
1. Introduction section should provide the structure of the paper as a last paragraph. It is missing.
2. Revise the name of section Theories and Literature Review. Reason: Theories is a too general word. Make is more spesific. In fact, if a theory section is to be provided, it should have more details. I suggest dividing these two headings into two, writing a more extended but compact theory section. Literature section to follow this section. Second suggestion: Move the theories section into the introduction. Because, as of it is it is written in a sense that it is at introductory level.
3. Literature review is missing paper details regarding the methodology followed, the data used, the findings obtained, the policy recommendations. If detail were given regarding the method for example, it is such as "they used nonlinear method". Which method? A panel thresold model for instance? What is the role of the threshold in that study? Further, do this revision so that it also direct the readers to your analysis section. Answer this in this part: what is missing in the literature upto today and what additional advantage will DID method you use will bring as a contribution?
4. The explanation of the denotation IIAP is first given at page 3 in theories section. It should be at the first place is is used in early page 3.
5. In all hypotheses, the "may" is used. Example: H1: The IIAP may significantly contribute to carbon efficiency.
I suggest "...has significant effects on carbon efficiency".
Additionally: Statistically, if you use words such as "contribute", this means a positive effect. Therefore, it necessitates a one-tail testing. I assume that you followed the general approach and did the tests two-tail.
6. Similarly: "...Technological innovation may play a mediating role between..." should be "...Technological innovation has a mediating role between..."
7. The data section notes the following: "Considering the availability and completeness of data, this paper selects 277 cities at the prefecture-level in China from 2006 to 2019". Why? China has 687 cities. What is limiting in this selection? I know that 277 is a large data set, the reason of asking this is, you should state it. Further, I suggest emphasizing 277 cities and the hardness of data collection. This will help on underlining contributions of your paper as well.
8. You noted that the data for CO2 is interpolated. Why? This is not applicaple. I suggest revising the dataset and bringing the CO2 data to 2019 without interpolation. If there is a burden that limits you to do that, I suggest redesigning the experiment by bringing the sample to 2006-2017 which should not be preferred. Or, if you had to do it, state the reasoning.
9. For equations, alignment to the left of the page should be preferred.
10. The panel data used in the study has time properties. Why did the authors not do homogeneity tests, unit root tests (1st and 2nd gen) before the model estimations? I suggest adding these tests and revising the analysis afterwards.
11. Descriptive statistics table should include skewness, kurtosis and Jarque-Bera test result.
12. "Placebo test" results are given without explaining what it is theoretically. Also, there is no reference.
13. Similarly, after the heading "4.3.4. Other robustness tests" paragraph should be revised with references. Following which study?
14. As I noted above, hypotheses will be revised. Also check the interpretations of these after the findings. Example: "the coefficients of DID and Inn are both significantly neg-415 ative at the level of 1%, indicating that the improvement of regional technological innova-416 tion level can restrain pollution discharge. Thus, the hypothesis H4 is also verified." H4 was not one-sided. It was that the variable had a meditating effect. Check and allign if needed.
15. I suggest the heading 5.3. to be revised from Analysis of results Evaluation of results.
16. At line 507 and 512, what does siphon effect mean? It should be explained especially since it was also used in the abstract. Give reference for this term.
17. The section 6 is too long and conclusion section should be seperate in addition to be aroun 3 paragraphs. I suggest making a discussion before the conclusion. The name should be "discussion and policy implications". In the text, the policy implications already exist but the term should be emphasized now in text. Start with an intro section as following the findings, important policy implications are obtained....
18. Firstly,...Secondly,... is used several times in conclusion in the paragraphs following each other. It can be revised.
19. In text, nonlinear analyses are noted that they are few for industrial agglomeration and CO2 emissions. This is similar situation for analyses focusing nonlinearity in Co2 economic production with long-run and short-run results. The following papers could be referenced with this respect at early stages of the paper as line 58. This will help provide bridges for the future researchers between different literature which are in fact extreemely related.
Economic growth and CO2 emissions: an investigation with smooth transition autoregressive distributed lag models for the 1800–2014 period in the USA
Markov-switching vector autoregressive neural networks and sensitivity analysis of environment, economic growth and petrol prices
Author Response
Response to Reviewer 1 Comments
Point 1: Introduction section should provide the structure of the paper as a last paragraph. It is missing.
Response 1: We have added the structure of the paper in the last part of the introduction. Please see the revised manuscript for details.
Point 2: Revise the name of section Theories and Literature Review. Reason: Theories is a too general word. Make is more spesific. In fact, if a theory section is to be provided, it should have more details. I suggest dividing these two headings into two, writing a more extended but compact theory section. Literature section to follow this section. Second suggestion: Move the theories section into the introduction. Because, as of it is it is written in a sense that it is at introductory level.
Response 2: In response, according to the suggestion, firstly, we have changed the title to Literature Review. Secondly, the theories section has been moved to the introduction. Please see the revised manuscript for details.
Point 3: Literature review is missing paper details regarding the methodology followed, the data used, the findings obtained, the policy recommendations. If detail were given regarding the method for example, it is such as "they used nonlinear method". Which method? A panel thresold model for instance? What is the role of the threshold in that study? Further, do this revision so that it also directs the readers to your analysis section. Answer this in this part: what is missing in the literature upto today and what additional advantage will DID method you use will bring as a contribution?
Response 3: We are grateful to the reviewer for raising the important point. In response, we have revised the references involved in the literature review section. More specifically:
On the one hand, we explained the data and methods of the references mentioned in detail; on the other hand, we deleted the redundant transition paragraph in the text. Please see the revised manuscript for details.
Point 4: The explanation of the denotation IIAP is first given at page 3 in theories section. It should be at the first place is is used in early page 3.
Response 4: According to the review’s suggestion, we put the denotation IIAP on page 1. More specifically:
Based on the traditional industrial agglomeration, innovation industrial agglomeration emphasizes the agglomeration development with innovation as the core [1,2]. It refers to the gathering of enterprises, R&D and service institutions related to the industrial chain in a specific region to form a cross-industry and cross-regional industrial organization form through division of labor and cooperation, and collaborative innovation. The IIAP is focused on high-tech and strategic new industries. Since the Ministry of Science and Technology of China officially started to implement the first batch of innovative industrial agglomeration pilot (IIAP) in 2013, China attached importance to its development and then gradually expanded the pilot scope in 2014 and 2017. By 2020, China has gradually laid out 48 innovative industrial agglomeration pilot construction units and 61 innovative industrial agglomeration pilot units, involving 55 prefecture level cities. Please see the revised manuscript for details.
Point 5: In all hypotheses, the "may" is used. Example: H1: The IIAP may significantly contribute to carbon efficiency. I suggest "...has significant effects on carbon efficiency".
Additionally: Statistically, if you use words such as "contribute", this means a positive effect. Therefore, it necessitates a one-tail testing. I assume that you followed the general approach and did the tests two-tail.
Point 6: Similarly: "...Technological innovation may play a mediating role between..." should be "...Technological innovation has a mediating role between..."
Point 14: As I noted above, hypotheses will be revised. Also check the interpretations of these after the findings. Example: "the coefficients of DID and Inn are both significantly neg-415 ative at the level of 1%, indicating that the improvement of regional technological innova-416 tion level can restrain pollution discharge. Thus, the hypothesis H4 is also verified." H4 was not one-sided. It was that the variable had a meditating effect. Check and allign if needed.
Response 5,6 and 14: We thank the reviewer for this important question and we are very appreciative of the suggestion to carry out a one-tail testing. This is what our paper is trying to express. Therefore, we have revised all hypotheses. The revised results are as follows:
H1: The IIAP has a significantly positive effect on carbon efficiency.
H2: The IIAP significantly reduces environmental pollution.
H3: Technological innovation has a mediating role between the IIAP and carbon efficiency.
H4: Technological innovation has a mediating role between the IIAP and environmental pollution.
Point 7: The data section notes the following: "Considering the availability and completeness of data, this paper selects 277 cities at the prefecture-level in China from 2006 to 2019". Why? China has 687 cities. What is limiting in this selection? I know that 277 is a large data set, the reason of asking this is, you should state it. Further, I suggest emphasizing 277 cities and the hardness of data collection. This will help on underlining contributions of your paper as well.
Response 7: We thank the reviewer for this important question and we are very appreciative of the suggestion to state the samples of this paper. We choose 277 prefecture-level cities in China as samples for the following reasons:
1) The implementation level of the pilot policy of innovative industrial agglomeration is in prefecture-level cities, so choosing cities at prefecture-level cities shows that this issue has the highest relevance.
2) The number of prefecture-level cities published in China Statistical Yearbook is 293. Considering the cancellation and merger of prefecture-level cities during this period, and the elimination of some samples with serious data loss in Tibet and Xinjiang, 277 prefecture-level cities were finally selected, which is basically consistent with previous studies on prefecture-level cities. Of course, the choice of prefecture-level cities can only study the influence of IIAP in China from a broader level, and it is difficult to separate the influence of different cities in the same prefecture-level city, which is the limitation of choosing prefecture-level cities. Therefore, this paper considers the spatial effect of the policy in the follow-up study, in order to evaluate the policy effect more accurately. Please see the revised manuscript for details.
Point 8: You noted that the data for CO2 is interpolated. Why? This is not applicaple. I suggest revising the dataset and bringing the CO2 data to 2019 without interpolation. If there is a burden that limits you to do that, I suggest redesigning the experiment by bringing the sample to 2006-2017 which should not be preferred. Or, if you had to do it, state the reasoning.
Response 8: According to the reviewer’s suggestion, we have revise the dataset and bringing the CO2 data to 2019 without interpolation. The specific details are as follows:
We searched the CEADs database and found that Shan, Guan, Hang, Zheng, Li, Guan, Li, Zhou, Li and Hubacek published the carbon emission data of 290 prefecture-level cities in China from 1997 to 2019 after August 24th, 2022 (after the completion of our paper). Based on this, we updated the CO2 emission data, and updated the measurement results related to CEE. Please see the revised manuscript for details.
(The following are the website addresses and related references of the latest data and original data in this paper).
New data：https://www.ceads.net/user/index.php?id=1280&lang=en
Shan,Y.; Guan, Y.; Hang, Y.; Zheng, H.; Li, Y.; Guan, D.; Li, J.; Zhou, Y.; Li, L.; Hubacek, K. City-level emission peak and drivers in China. Science Bulletin 2022, 67, 18, 1910-1920.
Old data：https://www.ceads.net/user/index.php?id=1057&lang=en
Chen, J.; Gao, M.; Cheng, S.; Hou, W.; Song, M.; Liu, X.; Liu, Y.; Shan, Y. County-level CO2 emissions and sequestration in China during 1997–2017. Sci Data 2020, 7, 391.
Point 9: For equations, alignment to the left of the page should be preferred.
Response 9: We have adjusted the mathematical formulas of the full text. Please see the revised manuscript for details.
Point 10: The panel data used in the study has time properties. Why did the authors not do homogeneity tests, unit root tests (1st and 2nd gen) before the model estimations? I suggest adding these tests and revising the analysis afterwards.
Response 10: According to the review’s suggestion, we consulted the materials of homogeneity test and read the paper related to homogeneity test. However, we found that the homogeneity test is a method used to test whether the overall variance of different samples is the same, and is generally applied more to the analysis of cross-sectional data, so it does not seem to be applicable in the panel data study in this paper. Also, we did not find this practice in other similar studies, so we did not add this test in the paper. In order to check the smoothness of the data, we chose the HT test and IPS test for short panel data to perform the unit root test, which also proved the smoothness of the data in this paper. This result is reflected in the text. Please see the revised manuscript for details.
Point 11: Descriptive statistics table should include skewness, kurtosis and Jarque-Bera test result.
Response 11: We have added the results of Skewness, Kurtosis and Jarque-Bera test. Please see the revised manuscript for details.
Point 12: "Placebo test" results are given without explaining what it is theoretically. Also, there is no reference.
Response 12: We have merged and adjusted the placebo test content (4.3.1) in this article. More specifically:
Although a large number of urban characteristic variables have been controlled in quasi-nature experiments, there may still be some non-observed urban characteristic factors that affect the evaluation effect of IIAP. we refer to the method of Yang,Lin,Li and He[3] and Sun and Li [2] use counterfactual methods to conduct the placebo test by randomly generating pseudo treatment group dummy variable treatrandom and pseudo policy impact dummy variable postrandom. Specifically, we conduct 500 random samplings on the sample data and repeated regression based on the benchmark model (3). We randomly select 55 cities each time as the treat group, and the policy time is given randomly, and finally get 500 groups of interaction terms DIDrandom (i.e. treatrandom×postrandom). If the regression coefficient of the DIDrandom is not significant, it indicates that the environmental friendly effect is due to the IIAP, rather than other unobservable factors. Otherwise, the estimation results are not robust. Further, the kernel densities of the 500 estimated coefficients and their p values for each of the two data sets are presented separately in Figure 2. The results show that the randomly generated estimated coefficients are mainly concentrated around 0 and most of the p values are greater than 0. The actual estimated coefficients of the policy (The vertical dotted lines represent the true coefficients 0.0261 and -0.1114 separately.) are significantly different from the placebo test results, indicating that the improvement of the environment is really caused by the IIAP. Therefore, it is reasonable to believe that the estimated results and the core conclusions are very robust. Please see the revised manuscript for details.
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Figure 2. Placebo test.
Point 13: Similarly, after the heading "4.3.4. Other robustness tests" paragraph should be revised with references. Following which study?
Response 13: We have added references to this section. More specifically:
This paper also implemented the following robustness test methods, and Table 5 shows all test results. 1) Exclude all municipalities and provincial capitals samples [5]. 2) To reduce the influence of outliers, CEE and EPI are treated with 1% bilateral winsorization [4]. 3) Considering the possible lag effect of policy implementation, we lagged the explanatory variable DID for one period [5]. 4) Replace the fixed effect of cities with the fixed effect of provinces. All the above robustness test results are statistically significant, which corroborates the main conclusions of this paper. Please see the revised manuscript for details.
Point 15: I suggest the heading 5.3. to be revised from Analysis of results Evaluation of results.
Response 15: We have modified the heading 5.3 to “Analysis and evaluation of spatial effect results”.
Point 16: At line 507 and 512, what does siphon effect mean? It should be explained especially since it was also used in the abstract. Give reference for this term.
Response 16: We have adjusted the content of lines 505-514. Moreover an explanation of the siphon effect with relevant references were added this section. More specifically:
The coefficient of Wtn,tDID is significantly positive at the level of 10%, which indicates that although the implementation of IIAP policy has promoted the environment-friendly development of pilot cities, it is not conducive to reduce pollution and emissions of surrounding cities in the control group. This agglomeration effect is to attract the production factors such as capital, labor and technology from the neighboring regions to the central region, which promotes the continuous growth of its economy and trade and further widens the development gap between the central region and the neighboring regions, which is called "siphon effect" [6]. The main reason for this phenomenon may be that the industrial agglomeration pilots generally enjoy the policy advantages of low land prices, preferential taxation, etc. In consequence, it will attract the inflow of knowledge and technological innovation elements from surrounding areas and improve the innovation level of pilot cities. At the same time, its siphon effect inhibits the improvement of innovation level of the neighboring areas, which is unfavorable to the environmental improvement of the surrounding areas in a short time. Please see the revised manuscript for details.
Point 17: The section 6 is too long and conclusion section should be seperate in addition to be aroun 3 paragraphs. I suggest making a discussion before the conclusion. The name should be "discussion and policy implications". In the text, the policy implications already exist but the term should be emphasized now in text. Start with an intro section as following the findings, important policy implications are obtained....
Response 17: Section 6 includes four natural paragraphs: background introduction, conclusion, policy recommendation and future prospect respectively. According to the suggestion, we have changed the title to discussion and policy implication. Moreover, in the background introduction, we supplemented the pilot policy, technological innovation and environmental issues. More specifically:
On the one hand, the pilot policy stimulates the innovation and development of enter-prises, on the other hand, the pilot policy takes the government as the main body. The local government will play a guiding and supervisory role. With regular accessing the work progress, problems such as difficulties in resource flow, excessive consumption of raw materials, and increased pollutant emissions encountered during the development of innovative industrial agglomeration can be solved in time. Please see the revised manuscript for details.
Point 18: Firstly,...Secondly,... is used several times in conclusion in the paragraphs following each other. It can be revised.
Response 18: We have changed the use of firstly, secondly. Please see the revised manuscript for details.
Point 19: In text, nonlinear analyses are noted that they are few for industrial agglomeration and CO2 emissions. This is similar situation for analyses focusing nonlinearity in Co2 economic production with long-run and short-run results. The following papers could be referenced with this respect at early stages of the paper as line 58. This will help provide bridges for the future researchers between different literature which are in fact extremely related.
Response 19: We completely agree with the reviewer, and we have added the references mentioned [7,8].
References
- Liu, Z.; Zeng, S.; Jin, Z.; Shi, J.J. Transport infrastructure and industrial agglomeration: Evidence from manufacturing in-dustries in China. Transp. Policy 2022, 121, 100-112.
- Wang, H. Does the Innovation-oriented Industry Cluster Pilot Policy Promote the Development Level of Urban High-tech Industry? Modern. Econ. Res 2022, 94-104. (in Chinese)
- Yang, X.; Lin, S.; Li, Y.; He, M. Can high-speed rail reduce environmental pollution? Evidence from China. J. Clean. Prod 2019, 239, 118135.
- Sun, L.; Li, W. Has the opening of high-speed rail reduced urban carbon emissions? Empirical analysis based on panel data of cities in China. J. Clean. Prod 2021, 321, 128958.
- Yan, J.; Zhao, J.; Yang, X.; Su, X.; Wang, H.; Ran, Q.; Shen, J. Does Low-Carbon City Pilot Policy Alleviate Urban Haze Pollution? Empirical Evidence from a Quasi-Natural Experiment in China. Int. J. Environ. Res. Public Health 2021, 18.
- Ke, S.; Feser, E. Count on the Growth Pole Strategy for Regional Economic Growth? Spread–Backwash Effects in Greater Central China. Regional Studies 2010,44,1131-1147.
7.Bildirici, M.; Ersin, Ö.Ö. Economic growth and CO2 emissions: an investigation with smooth transition autoregressive distributed lag models for the 1800-2014 period in the USA. Environ Sci Pollut Res 2018, 25, 200-219.
8.Bildirici, M.; Ersin, Ö. Markov-switching vector autoregressive neural networks and sensitivity analysis of environment, economic growth and petrol prices. Environ Sci Pollut Res 2018, 25, 31630-31655.
Author Response File: 
Author Response.pdf
Reviewer 2 Report
The paper is interesting but there are some issues that need to be improved.
Section 2 is very long and cumbersome. It does not highlight the role of the Inn as a mediation mechanism in the influence of industrial agglomeration on the environment. The authors get lost explaining the effects of traditional industrial agglomeration on environment.
I suppose you mean: H2: The IIAP may reduce environmental pollution
H4, I suppose it should say Technological…….. pollution
I have not found table S1 in Appendix. I think appendix A is missing
The paragraph of epigraph 3.3.1 Benchmark model is the same as the 1st paragraph of 3.3.2, except for the reference. There is some mistake. It seems that with the mediation model an estimation is made in two stages, but as it is explained, I can't understand it..
You conclude that the IIAP policy promotes environment-friendly development mainly by improving technological innovation level, but the results of Table 6 indicate that the effect of Inn is very small. This result does not seem to support your hypothesis 3 and 4, or very weakly. This point should be considered because that seems to be the fundamental idea of ​​the paper. Also, the spatial analysis should refer for the mediating effect model because is the central axis of your paper. The robustness test too.
The references are excesive.
Author Response
Response to Reviewer 2 Comments
Point 1: Section 2 is very long and cumbersome. It does not highlight the role of the Inn as a mediation mechanism in the influence of industrial agglomeration on the environment. The authors get lost explaining the effects of traditional industrial agglomeration on environment.
Response 1: In response, we have shortened the section 2 by cutting and splitting the theories. Then, we expand in detail the literature review of the technological innovation. Finally, we delete the traditional industrial agglomeration theory, and put the current situation of innovative industrial agglomeration in China into the introduction. Please see the revised manuscript for details.
Point 2: I suppose you mean: H2: The IIAP may reduce environmental pollution H4, I suppose it should say Technological…….. pollution
Response 2: In response, according to the suggestion, we have revised all hypotheses. The revised results are as follows:
H1: The IIAP has a significantly positive effect on carbon efficiency.
H2: The IIAP significantly reduces environmental pollution.
H3: Technological innovation has a mediating role between the IIAP and carbon efficiency.
H4: Technological innovation has a mediating role between the IIAP and environmental pollution.
Point 3: I have not found table S1 in Appendix. I think appendix A is missing
Response 3: We are grateful to the reviewer for raising the errors that appear in this paper, for which we have checked in detail and changed the Table S1 to Table A1.
Point 4: The paragraph of epigraph 3.3.1 Benchmark model is the same as the 1st paragraph of 3.3.2, except for the reference. There is some mistake. It seems that with the mediation model an estimation is made in two stages, but as it is explained, I can't understand it.
Response 4: There is a difference in the setting and referencing of the benchmark and Mediation effect model. We thank the review for pointing out the errors in this paper, and we have made changes to it. More specifically:
3.3.1 By the end of 2019, three batches of pilot cities for innovative industrial agglomeration have been established. To accurately measure the environmental effects of this policy, this paper refers to the practice of Beck,Levine and Levkov [1] and constructs the following multi-period DID model. Please see the revised manuscript for details.
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where i represents the prefecture-level city, t represents the year. Yi,t is the dependent variable representing CEEi,t and EPIi,t. The core explanatory variable DIDi,t indicates whether city i implements the innovative industrial agglomeration pilot policy in year t. If city i is set up as a pilot city, the DID value is 1 in the current year and later; otherwise, the DID value is 0. Xi,t represents control variables, including Eco, Labor, Open, Fin, Ind, Urb, Rd, Int. μi is the individual fixed effect, γt is the time fixed effect. εi,t is the random perturbation terms.
Point 5: You conclude that the IIAP policy promotes environment-friendly development mainly by improving technological innovation level, but the results of Table 6 indicate that the effect of Inn is very small. This result does not seem to support your hypothesis 3 and 4, or very weakly. This point should be considered because that seems to be the fundamental idea of the paper. Also, the spatial analysis should refer for the mediating effect model because is the central axis of your paper. The robustness test too.
Response 5: We completely agree with the reviewer. We are also aware of this problem in the paper, so we performed bootstrap test. The results show that the mediating effect of technological innovation exists, but is relatively weak. Regarding the spatial analysis should refer for the mediating effect model, we agree with the reviewers' suggestion. In the spatial analysis of the paper, we have elaborated technological innovation. eg, “it will attract the inflow of knowledge and technological innovation elements from surrounding areas and improve the innovation level of pilot cities. At the same time, its siphon effect inhibits the improvement of innovation level of the neighboring areas, which is unfavorable to the environmental improvement of the surrounding areas in a short time. Please see the revised manuscript for details”, which is reflected in text 5.3. Please see the revised manuscript for details. We conduct robustness tests focusing on different methods to demonstrate that the test results are consistent with the core conclusions. The main reason is that we have elaborated in detail in the previous theoretical analysis. Therefore, robustness tests only show the statistical results briefly, without detailed discussion.
Point 6: The references are excesive.
Response 6: We have deleted some references and reordered the references.
References
- Beck, T.; Levine, R.; Levkov, A. Big Bad Banks? The Winners and Losers from Bank Deregulationin the United States. J. Financ. Econ 2010, 65, 1637-1667.
Author Response File: Author Response.pdf
Round 2
Reviewer 1 Report
Dear Authors,
Thank you for carefully attending the critiques and providing detailed explanations.
The paper is greatly improved in this version and I am happy to see this final version.
Reviewer 2 Report
