Can the Policy of National Urban Agglomeration Improve Economic and Environmental Gains? Evidence from Quasi-Natural Experiments with 280 Cities in China

Urban agglomerations are an important symbol in the development of modernization. In this paper, we utilize the National Urban Agglomeration (NUA) policy as a quasi-natural experiment in the Chinese context. Adopting data from 280 cities from 2005 to 2019 as research samples, we use difference-in-differences (DID) and spatial difference-in-differences models (SDID) to examine the effect and mechanism of the implementation of the NUA policy on economic development and environmental pollution in China. The result shows that the NUA policy can achieve urban economic and environmental gains, which still holds after the robustness test. The heterogeneity analysis showed that the effects of the NUA policy are more evident in large and medium-sized cities. The curbing effect of the NUA policy on pollution emissions is apparent in the eastern region. Considering spatial heterogeneity, the expected economic and environmental benefits of the NUA policy are partially borne out. In addition to the green technology innovation, the NUA policy also influences regional economic development and environmental pollution through industrial agglomeration and the upgrading of industrial structures, respectively. It is essential to strengthen regional cooperation and establish the development concept of community interests between cities.