Abstract Based on the provincial panel data of 17 two-digit manufacturing industries in China from 2000 to 2014, this paper classifies manufacturing industries by factor density and calculates manufacturing efficiency using unexpected output DEA. Adopting nonlinear PSTR model, the paper then analyzes the relationship between agglomeration and efficiency in different manufacturing industries in different regions. The results show that:(1)It’s not a positive relationship between manufacturing efficiency and agglomeration when introducing negative externality. Manufacturing industry here is divided into types of excessive agglomeration,advancing agglomeration and decreasing agglomeration. Negative externality severely hinders productivity in enterprises of excessive and decreasing agglomeration; (2)Eastern coastal areas are already experiencing excessive agglomeration while excessive agglomeration has only started to show up in western and central areas; (3) Eastern coastal area efficiency has a negative relationship with railway intensity, but a positive one with energy consumption. Traffic congestion hinders the development of economy, and economic growth in the eastern region is achieved at the cost of the high-energy consumption.
2017, Vol. 34 
