Domestic R&D, technology acquisition, technology assimilation and China's industrial carbon intensity: Evidence from a dynamic panel threshold model.

Abstract

Carbon emissions generated by China's industrial sectors-a result of rapid industrialization and extensive use of coal-have raised the Chinese government's concerns. In this study, we use a panel dataset representing China's industrial sectors over 2000-2010 to analyze the effect of domestic R&D, technology acquisition, and technology assimilation on China's industrial carbon intensity using both linear and non-linear analysis. Conventional dynamic panel regression analyses based on the difference generalized method of moments and system generalized method of moments are employed. The estimation results imply that domestic R&D activities and technology acquisition from domestic and abroad are conducive to reducing carbon intensity. Since the effect of technology acquisition on carbon intensity may be determined by technology assimilation factors, further investigation based on dynamic panel threshold model is conducted. The results of the dynamic panel threshold model indicate that technology assimilation factors, such as domestic R&D and market openness level, are crucial determinants of the level of industrial carbon intensity.