Energy intensity and investment ownership across Chinese provinces

Abstract

The main objective of this paper is to investigate whether openness and investment ownership are key factors in explaining the diffusion of energy-saving technologies in China. Compared with previous studies, the novel aspect of this work is the use of a rich dataset at provincial level, which allows the high level of regional heterogeneity to be taken into consideration. The unbalanced regional growth has been translated into differences in the need for energy resources across the vast territory of China. A detailed analysis of these issues may provide new insights into the energy situation in this country. The analysis is also disaggregated by type of energy: coal, electricity and petroleum. We estimate the models by panel-corrected standard errors, developed by Beck and Katz (1995), over the period . Results obtained confirm the hypothesis that both foreign and non-state investments play a leading role in the decline of energy intensity across Chinese regions, whereas there is no evidence of a positive contribution of state investment. The findings also reveal differences in energy intensity across regions, thus confirming the importance of accounting for the regional dimension when analyzing energy consumption in China.

China’s Energy Intensity, Determinants and Spatial Effects

“…Analysis of the determinants of energy intensity is based on the following model applied by Yuxiang and Chen [11], Herrerias et al [8] and Sadorsky [12]:…”

“…A large number of empirical studies on energy intensity consider a variety of important factors [6][7][8]; however, few however touch upon spatial spillover effects. Most of the studies employed classical econometric methods.…”

Analysis of Influencing Factors of Change of Manufacturing Energy Intensity in China Based on WSR System Methodology and VAR Model

“…M. J. Herrerias, A. Cuadros and V. Orts (2013) found non-state investment played a leading role in regional energy intensity decline and there was no evidence that state-owned investment played an active role in energy intensity decline under panel correction standard error modeling based on 1985-2008 data. S. H. Cai et al (2012) analyzed influencing factors of energy efficiency change through dynamic and static panel data model based on provincial panel data.…”

Are Energy Market Integrations a Green Light for FDI?

“…This link between energy and FDI is well documented in the literature. Herrerias et al [4] show that energy intensity has an effect on FDI across the Chinese provinces.…”