From Growth to Quality: Evaluating the Green Transformation of Regional Manufacturing through Spatial Econometrics

Promoting the green transformation of the manufacturing sector from high-speed growth to high-quality development is of great significance for achieving sustainable development goals. This paper employs an Epsilon-Based Measure model with undesirable outputs to evaluate the green development efficiency of the manufacturing sector across 16 prefecture-level cities in Shandong Province from 2016 to 2023. Spatial econometric models are applied to explore the spatial spillover effects and driving mechanisms behind the green development efficiency. The empirical analysis reveals three key findings: (1) R&D expenditure by industrial enterprises above designated size exhibits a significant positive spatial spillover effect, suggesting that increased R&D investment in neighboring regions can enhance efficiency values. (2) Industrial electricity consumption and the number of employees show significantly negative direct effects, indicating that excessive reliance on traditional input factors hinders efficiency improvement. (3) The reduction of industrial waste gas emissions has a positive spatial spillover effect, whereas the spatial impact of industrial wastewater emissions is statistically insignificant. This paper contributes to the understanding of how spatial factors and environmental and technological considerations to influence the quality-oriented transformation of regional manufacturing industries.