Determining the factors driving China's industrial energy intensity: Evidence from technological innovation sources and structural change

Abstract

The question of how to reduce energy intensity has been a hot issue of social concern. However, there is lack of detailed information from the perspective of technological innovation sources and structural change for policy consideration. To better understand the influence of different technological innovation sources and structural change on industrial energy intensity, this paper applies both linear and non-linear methods of empirical analysis. The conventional linear regression analysis suggests that indigenous research and development (R&D) exerts the most control on energy intensity reduction. Technology acquisitions, both domestically and internationally, have a significant impact on industrial energy intensity. Increases in the proportion of state-owned enterprises within industry and the expansion of the industrial sectors both have a negative effect on energy intensity reduction, but improving the entry level of foreign enterprises can reduce energy intensity. Further, a dynamic panel threshold model indicates that effects of different technological innovation sources and structural change on industrial energy intensity are nonlinear. These findings indicate that increasing R&D inputs and promoting coordinated development between different R&D activities, in addition to adjusting ownership structure, are of great significance for controlling industrial energy intensity.