Investigating the Effect of Industrial Agglomeration on Pollution Agglomeration: Spatial Econometric Approach (The Case of Selected MENA Countries)

On the one hand, the development of industry increases economic growth and on the other hand, due to higher pollution coefficients, it reduces the quality of the environment. Therefore, creating an optimal structure of the industry to reduce the negative externalities is very importance. Accordingly, the study by using the statistical evidence of MENA selected countries over 2010-2017 and applying spatial econometrics approach investigates the effect of industrial agglomeration on entropy index as pollution agglomeration.  The results show that there are spatial effects of pollutant emissions among the studied countries, Also, the agglomeration of the industry reduces the agglomeration of pollutants due to advantage of spillover effect of knowledge and technology and matching skills with jobs. In addition, the intensity of energy consumption increases the agglomeration of pollution. The Kuznets curve in the relationship between GDP and pollution agglomeration is confirmed by the nonlinear relationship between the two variables. Ultimately, the openness of the economy in neighboring countries due to the effects of spatial spillover leads to a reduction in pollution agglomeration.