Does industrial upgrading improve eco-efficiency? Evidence from China's industrial sector

Promoting industrial upgrading is the fundamental path for China to realize the coordination of industrial development and ecological protection. This paper firstly measures the industrial upgrading index (IUI) and eco-efficiency of 37 sub-industries in China's industrial sector based on the comprehensive weighting method and super-efficiency slacks-based measure model, and then for the first time, examines the impact of industrial upgrading on China's industrial eco-efficiency and its differences among industries and influential mechanisms using the panel data models. The following main conclusions are obtained. First, both the IUI and eco-efficiency of China's whole industrial sector showed an upward trend from 2005 to 2019. Second, there are significant gaps in the IUI and eco-efficiency among industries, and these gaps gradually increase in 2005–2019. Third, industrial upgrading significantly improves China's industrial eco-efficiency, and the results of robustness test also support this conclusion. Fourth, industrial upgrading positively affects the eco-efficiency of both high-pollution and low-pollution industries, and the positive effect on low-pollution industries is slightly greater than that on high-pollution industries. Fifth, industrial upgrading improves industrial eco-efficiency by enhancing production efficiency and energy utilization efficiency and optimizing energy consumption structure.