Energy Efficiency Convergence in China: Catch-Up, Lock-In and Regulatory Uniformity

Abstract

This paper examines alternative hypotheses of beta convergence for different measures of energy efficiency. We collect a novel set of prefecture-level data that substantially extend the breadth of the datasets ever used in this literature. GMM estimators are then used to empirically test the national and club convergence of energy efficiency among these prefectures. We find strong evidence for prefecture-level national and club convergence in energy efficiency. In particular, the listed key environmental protection (KEP) prefectures, prefectures in central and western regions and prefectures not listed as resource-based (RB) converge faster than the non-KEP prefectures, prefectures in eastern region and RB prefectures. Sensitivity analyses suggest that these results are robust to alternative measures of energy efficiency and GMM specifications.