An Empirical Study of the Impact of Urbanization on Industry Water Footprint in China

How to advance new urbanization initiatives and reduce the water footprint of industries is one urgent issue about urbanization that needs to be resolved. Based on spatial dynamic panel data, we used the system GMM (Generalized Method of Moments) to study the impact of urbanization on the industrial water footprint. The results show that, overall, urbanization increases the industrial water footprint, industrial virtual water footprint, and industrial gray water footprint in China. There are sectoral and regional differences in the impact of urbanization. Specifically, urbanization reduces the agricultural water footprint and agricultural virtual water footprint but raises the agricultural gray water footprint. Urbanization increases the manufacturing water footprint, manufacturing virtual water footprint, and gray water footprint. Urbanization reduces the virtual water footprint of the service industry but increases the water footprint and gray water footprint in the service industry. At the regional level, urbanization increases the industrial water footprint and gray water footprint across the three major regions. In the eastern region, urbanization has little effect on increasing the industrial water footprint, and reduces the industrial virtual water footprint, whereas in the central and western regions urbanization increases the industrial virtual water footprint. In all three regions, urbanization reduces the agricultural water footprint, increases the manufacturing and service water footprints, reduces the virtual water footprints of agriculture and services, and increases the gray water footprint of agriculture, manufacturing, and services. In the eastern region, the reducing effect of urbanization is the greatest and the increasing effect of urbanization is the smallest. Additionally, in the eastern region, urbanization has reduced the virtual water footprint of manufacturing, whereas in the central and western regions urbanization has increased the virtual water footprint of manufacturing.