Shoving companies right next to their biggest rivals is actually one of the best ways to make them go green.
March 24, 2026
Original Paper
Do Regional Clusters Help Firms Reduce Greenhouse Gas Emissions?
SSRN · 6387540
The Takeaway
While dense business hubs are often viewed as 'concrete jungles' of pollution, they actually accelerate climate goals. These 'clusters' allow green innovations to spill over between neighbors and provide shared access to the specialized green labor and capital needed to cut emissions.
From the abstract
We study whether location within a regional cluster of economically related businesses helps firms curb their greenhouse gas emissions in response to shifts in climate policy. After the Paris Agreement, facilities in denser regional clusters significantly reduced emissions relative to their peers in less dense regional clusters. The effect is stronger in regions with potentially greater agglomeration benefits (knowledge spillovers, supply-chain relationships, and access to skilled labor), better