How does industrial co-agglomeration affect high-quality economic development? Evidence from Chengdu-Chongqing Economic Circle in China

Chengdu-Chongqing Economic Circle serves as a comprehensive industrial base and industrial agglomeration area. Its transformation is crucial for high-quality economic development in western China, and industrial coagglomeration and technological innovation may play a key role. Using panel data of 16 cities in the Chengdu-Chongqing Economic Circle, we evaluate the temporal and spatial patterns of high-quality economic development from 2008 to 2020 to explore the impact of industrial co-agglomeration on high-quality economic development, and how this impact fluctuates when technological innovation is included. The empirical results show that the overall level of high-quality economic development is increasing, while the gap between the cities in the sample is widening. The focal point of high-quality economic development is also moving towards the southeast and its spatial agglomeration is increasingly significant. Industrial co-agglomeration has a positive direct effect on high-quality economic development, but a negative spill-over effect. Technological innovation has a positive and partial mediation effect on industrial co-agglomeration and high-quality economic development. The findings of this study suggest policy makers to accelerate industrial co-agglomeration process and increase technology innovation investment, so as to more efficiently promote the high-quality economic development of Chengdu-Chongqing Economic Circle.