Economic Agglomeration and District-Level Carbon Emissions in Indonesia
DOI:
https://doi.org/10.15408/sjie.v15i2.50229Keywords:
economic agglomeration, employment density, carbon emissions, spatial concentration, nonlinear relationshipAbstract
Research Originality: This study contributes to the literature by incorporating employment density as a proxy of economic agglomeration into an extended STIRPAT framework to examine its nonlinear relationship with district-level carbon emissions in Indonesia.
Research Objectives: This study aims to investigate whether economic agglomeration promotes emission efficiency or intensifies environmental pressure, and to identify potential nonlinear dynamics across Indonesian districts.
Research Methods: This study employs a balanced panel dataset of 514 districts and municipalities in Indonesia over the period 2017–2024. A two-way fixed-effects model is estimated within an extended STIRPAT framework, with a quadratic specification to capture nonlinear effects.
Empirical Results: The results indicate that economic agglomeration is associated with lower carbon emissions per capita, suggesting efficiency effects. However, the nonlinear estimation reveals a U-shaped relationship: agglomeration reduces emissions at lower levels but increases environmental pressure beyond a threshold. The findings also indicate substantial regional heterogeneity.
Implications: The results suggest that agglomeration does not inherently lead to environmental improvements. Differentiated policies should strengthen regional growth and efficiency in low-density areas while prioritizing low-carbon transitions and congestion mitigation in dense regions.
JEL Classification: Q56, R12, O18
How to Cite:
Nugroho, R.A. & Hartono, D. (2026). Economic Agglomeration and District-Level Carbon Emissions in Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 15(2), 471-486. https://doi.org/10.15408/sjie.v15i2.50229.
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