The Spatial Effects of Location Quotients on China’s Manufacturing Economic, Technological and Environmental Performance: An Empirical Study Based on the Spatial Durbin Model

Abstract

This study employs the Location Quotient (LQ) to quantify the extent of manufacturing agglomeration within the Chinese manufacturing sector. Building on this metric, an analytical framework encompassing three key dimensions — economic, technological, and environmental — is established to systematically examine the LQ’s direct and spatial spillover effects on manufacturing performance. Utilizing panel data from 30 Chinese provinces (excluding Hong Kong, Macao, Taiwan, and Xizang) spanning 2008 to 2022, an empirical analysis is conducted using the Spatial Durbin Model (SDM). The findings reveal several key insights: Regarding economic performance, the LQ exerts a significant positive impact on both local and neighboring regions, with a total effect of approximately 9.77. However, for technological performance, the LQ’s direct effect is negative, resulting in a total effect of − 2.78, suggesting that excessive agglomeration may inhibit technological diffusion. Conversely, concerning environmental performance, the LQ exhibits a significant positive influence locally, yet its spatial spillover effect proves insignificant. Further analysis clarifies that while economic factors play a promotional role in both direct and spillover effects, technological factors contribute more prominently to the spillover effects, and environmental factors display stage-specific differences in their spatial effects. This study ultimately elucidates the multi-dimensional spatial mechanisms through which the LQ influences manufacturing performance, offering important policy implications for optimizing the spatial layout of manufacturing industries, promoting regional coordinated development, and facilitating green transformation.