From the perspective of industrial agglomeration, this paper attempts to explore how much energy used is transformed into effective work affecting steel production and consumption. Using panel data of Chinese provinces from 1997 to 2016, we measure industrial agglomeration and effective energy service of the iron and steel industry. The panel threshold model is utilized with GDP per capita as the threshold variable, and a nonlinear framework is constructed to identify the relationship between agglomeration and effective energy service. The results show that the iron and steel industry exhibit agglomeration characteristics, with the average location entropy index exceeding 1. The effective energy service experiences a rise from 1997 to 2013, but declines from 2014 to 2016. The effective energy service in central and western regions lag behind that in eastern region. And with the economic growth, the influence of agglomeration on effective energy service is increasing. Finally, the paper suggests some policy priorities to improve the effective energy service of the iron and steel industry.
Keywords Iron and steel industry, Industrial agglomeration, Effective energy service, Panel threshold model