The Nexus Between Industrial Agglomeration and Green Innovation: A Review of Empirical Evidence

The relationship between industrial agglomeration and innovation has been extensively explored in the literature, with a growing focus on the impact of agglomeration on green innovation. This paper reviews the empirical studies investigating the effects of industrial agglomeration on green innovation in different geographic areas. Drawing on theories such as the Knowledge Spillover Theory of Entrepreneurship, Marshall externalities, and Jacobs externalities, the paper examines how agglomeration influences green innovation in a region. The review identifies four possible types of relationships: 1) agglomeration promotes green innovation, 2) agglomeration represses green innovation, 3) agglomeration and green innovation exhibit a nonlinear, U-shaped relationship, and 4) agglomeration and green innovation present an inverted U-shaped relationship. The study highlights the importance of regional characteristics and policy interventions in shaping these relationships. The rapid development of this field and the predominance of studies focused on China leave open questions regarding the applicability of these findings to other regions. Future research should explore the global applicability of these results and investigate policy implications to foster sustainable regional development through agglomeration and green innovation.