Appropriate technology and energy security: From the perspective of biased technological change

Abstract

The heavy import dependence on oil and natural gas has threatened China's energy security. This paper discusses how to reduce the input preference for import-dependent energy (i.e., oil and natural gas) in China's manufacturing sector by selecting appropriate technology. Firstly, we estimate the biased level of import-dependent energy through a heterogeneous stochastic frontier analysis model, and employ the system generalized method of moments (SGMM) strategy to investigate the effects of various sources of technological change on the biased level of import-dependent energy. Secondly, we examine the moderating effect of the absorptive capacity on the biased level of import-dependent energy. The results show that both the horizontal and backward technological spillover effects from foreign-funded enterprises and technology purchase significantly reduce the biased level of import-dependent energy, while the forward technological spillovers of foreign-funded enterprises, the learning-by-exporting effect and the command-and-control policy increase the biased level. Except for indigenous technological innovation, improving the absorptive capacity will magnify the impact of other sources of technological change. Therefore, the government should encourage technology purchase, invite high-quality foreign-funded enterprises, and optimize the direction of indigenous technological innovation.