Climate policy uncertainty and synergistic industrial agglomeration: What role does financial development play?☆

The intensification of global climate change and the uncertainty surrounding climate policies have significantly impacted economic development, particularly in the optimization of industrial structures. We analyze the relationship between climate policy uncertainty (CPU), financial development, and synergistic industrial agglomeration, utilizing panel data from cities at or above the prefectural level in China from 2003 to 2019. The results indicate that climate policy uncertainty has a significant negative effect on the synergistic agglomeration of manufacturing and productive services, particularly in the economically developed and highly urbanized eastern region. Furthermore, a U-shaped nonlinear relationship exists between climate policy uncertainty and agglomeration. Additionally, the level of financial development significantly mitigates the negative impact of climate policy uncertainty on industrial agglomeration, contributing to its stability and sustainability. We suggest that enhancing the transparency and stability of climate policies, strengthening the financial system, and promoting coordinated regional development can foster synergistic industrial agglomeration and alleviate the adverse effects of climate policy uncertainty.