Regional agglomeration, regulation, and agricultural sustainability: Evidence from China

We investigate how agricultural industrial agglomeration (AIA) and environmental regulation jointly influence agricultural green total factor productivity (AGTFP) in China's 30 provinces from 2004 to 2021. Framing AIA as a conduit for both agricultural economic growth and environmental improvement, we employ fixed-effects and threshold regressions to capture non-linearities. Results show that moderate AIA enhances AGTFP by lowering financing costs for green technologies and promoting resource reallocation, with the strongest effects in central-western grain regions. Formal environmental regulations bolster this agglomeration–productivity link up to a certain stringency, beyond which high compliance costs crowd out green investment. In contrast, informal community-driven pressures consistently improve AGTFP by fostering local demonstration and reputation effect. Our findings bridge government and public supervision by highlighting how moderate agricultural agglomeration and calibrated regulation can promote sustainable agricultural transformation.