The effect of research and development on the energy conservation potential of China’s manufacturing industry: The case of east region

Abstract

Technical innovation promotes manufacturing industry to achieve energy conservation and emission reduction. As an area that accounts for more than 50% of China’s economy, east region of China has taken the lead in developing and focusing on promoting industrial upgrading based on the innovation-driven development strategy. The potential solution of transforming China’s manufacturing industry is to enhance the capability of independent innovation by increasing the investment in research and development. Research on the sustainable development capacity of east region manufacturing industry has been giving important guidance for upgrading the manufacturing industry all over China. However, few studies explore the research and development effect on the energy-saving potential of manufacturing at the regional level, and study the individual dynamic behavior to reflect industry heterogeneity. In this paper, the dynamic panel data research method is employed to explore the influence of the research and development on energy conservation while introducing macroeconomic variables. Additionally, block bootstrap-based scenario analysis is employed to predict the energy conservation of manufacturing in east region in 2020 and 2025 based on historical annual data from 1990 to 2016. Compared with the business-as-usual scenario, the advanced scenario could reduce the energy demand of 427.53Mtce and 1066.28 million tons of coal equivalent in 2020 and 2025, respectively. The results indicate that there is much room for improvement in terms of the energy efficiency for China’s east region.