How Does Diversification of Producer Services Agglomeration Help Reduce Carbon Emissions Intensity? Evidence from 252 Chinese Cities, 2005-2018

Mitigating carbon emissions intensity (CEI) and promoting carbon neutrality at the city level are essential for addressing the challenges of global climate change and advancing sustainable development. This study examines the influence of producer services agglomeration diversification (PSAD) on CEI using an unbalanced panel dataset including 252 Chinese prefectural-level cities from 2005 to 2018 for empirical analyses. We find that improving PSAD in a city can significantly mitigate CEI. Stronger PSAD accelerates a city's industrial structure transformation from secondary- to tertiary-dominated in addition to boosting green development capabilities, both of which are confirmed to have concrete carbon emissions reduction effects. Furthermore, PSAD only significantly alleviates CEI in non-eastern cities in China, and the benefits of carbon emissions reduction are stronger after 2010. Our policy insights highlight land utilization in shaping the intracity layouts of producer services agglomerations (PSAs) and stress regional-level measures. Recognizing regional differences and integrating PSAs allocation with broader institutional measures can amplify PSAD's benefits.