Abstract
Given that energy is a significant input factor for modern economic growth, which has also brought the most severe negative externalities damage to the environment, improving energy efficiency is considered critical globally. As a large energy producer and consumer, China faces challenges from both the economy and the environment. This study used the generalized method of moments estimation techniques to examine the impact of foreign direct investment (FDI) technology spillovers on energy efficiency in a sample of manufacturing industries. A super-efficient data envelopment measure of energy efficiency is examined. The novelty of this study is that it analyzes both the quantitative and qualitative values of various spillover effects at the industry level. Using a panel data set on 26 manufacturing industries in Guangdong Province of China covering the period 2000–2018, the empirical results show a positive and statistically significant relationship between FDI competitive effects and energy efficiency. In contrast, this relationship is in the opposite position when demonstration effects of FDI technology spillovers occur. The results also show these effects have more impact to the low or middle energy consumption industries. The study provides a reference for the formulation of the FDI strategy and energy policy in the manufacturing sector.
Highlights
With the acceleration of industrialization and urbanization in China, energy demand has increased substantially
The estimated coefficient on the marketization variable is statistically significant at the 10% level. These results indicate that marketization has not much impact on energy efficiency in emerging economies
This study proposes an approach to examine the relationship between foreign direct investment (FDI) competitive effects, demonstration effects and energy efficiency, and tests this relationship empirically using industry level micro data
Summary
With the acceleration of industrialization and urbanization in China, energy demand has increased substantially. China’s carbon emissions reached 7.4 metric tons per capita in 2018 compared with the world average of 4.5. Manufacturing industries and construction consumed 32% of total fuel combustion Under the impact of the global pandemic on the industrial supply chain, China’s manufacturing industry took the lead in resuming work and production. The continuing development of the manufacturing industry inevitably consumes large amounts of energy and brings an irreparable impact on the environment. China aims to achieve carbon neutrality by 2060 and will peak carbon emissions before
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