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Industrialization and urbanization has rapidly advanced in China. Therefore, clarifying the relationship between industrial agglomeration and environmental pollution resolves questions if intensive or dispersed development should be adopted for the future Chinese industry or not. By distinguishing between specialized and diversified agglomeration, this paper adopts the threshold regression method to investigate the differentiated influence of industrial agglomeration stages on pollution emission reduction. This was based on panel data from 2003 to 2016 on 285 prefecture-level cities in China. The result indicates that moderate degrees of industrial agglomeration and suitable agglomeration modes are conducive for the reduction of pollution emission. From a perspective of environmental protection, the development of diversified agglomeration is superior to that of specialized agglomeration. Specifically, a “U-shaped” relationship was found between specialized agglomeration and environmental pollution, suggesting that the former first mitigated and then worsened environmental pollution. This staged evolution of diversified agglomeration exerts a more-complex influence on environmental pollution. The following policy implications have been proposed: The currently implemented industrial growth pole strategy in China should fully utilize the “self-purification” effect of agglomeration to achieve energy conservation and emission reduction. Furthermore, differentiated agglomeration policies should be formulated in response to various growth poles according to different stages of industrial agglomeration. In addition, efforts should be made towards creating an interactive early warning mechanism for the spatial distribution of both economic activities and pollution.

Diversified Agglomeration, Specialized Agglomeration, and Emission Reduction Effect—A Nonlinear Test Based on Chinese City Data