“…The clustering effect requires a continuous increase in the input of service production factors, thereby promoting further escalation of the industrial value chain. Dominant enterprises gradually erode market share, and the "survival of the fittest" effect becomes prominent in the market, leading to the elimination of low-value-added and inefficient enterprises from the market (Ermagun et al, 2023;Xiao et al, 2021). First, as the industrial agglomeration level increases, the external demand for manufacturing increases, the knowledge spillover effect improves, transaction costs decrease, and production efficiency improves.…”