The Impact of Foreign and Indigenous Innovations on the Energy Intensity of China’s Industries

Shuxing Chen,Junbing Huang,Cheng Huang,Xiangyang Du

doi:10.3390/su11041107

Shuxing Chen, Junbing Huang + Show 2 more

Open Access

https://doi.org/10.3390/su11041107

Copy DOI

Abstract

China’s industrial sectors have an approximate consumption amounting to 70% of the aggregate power of the entire country. Investigating the driving forces of the decline in the energy intensity is essential for accelerating China’s conversion into a low-carbon economy. Nowadays, there has been no agreement as yet when it comes to the impacts of China’s industrial sectors on energy intensity. The current research work studies the impacts of key driving forces, in particular foreign as well as indigenous innovations, on China’s industrial energy intensity in 34 industrial sectors between 2000 and 2010. Linear and nonlinear analysis methodologies are put to use. The linear empirical findings show that indigenous innovation primarily contributes to driving down the industrial energy intensity across the sampling duration. The foreign innovations, which take the shape of FDI as well as imports, are seen as benefiting the decline in industrial energy intensity; on the other hand, exports ramp up the industrial energy intensity. An additional investigation, on the basis of the panel threshold framework, indicates that the impact of foreign innovations by means of openness as well as industrial energy intensity has an association with the technological absorptive potential. The empirical evidence puts forward some pivotal inferences for policymakers with regard to China’s declining industrial energy intensity—for instance, exploitation of the maximum benefit associated with the technology spillovers; in addition, it is important to take into consideration the attributes and scenarios that impact industrial energy intensity.

Highlights

Energy is regarded as a necessary input for economic development, besides serving as the foundation for material generation
As the research and development (R&D) input intensity is considered to be a threshold variable, the findings presented in rows 10 to 12 of Table 4 indicate that the effect of foreign innovation in the shape of foreign direct investment (FDI) on the industrial energy intensity changes with the increase in the threshold variable
The current research work further employs the panel threshold model for determining how they exert an impact on the industrial energy intensity

Summary

Introduction

Energy is regarded as a necessary input for economic development, besides serving as the foundation for material generation. China has attained rapid economic development in the last 40 years, but it has manifested reliance on power. Ecological issues caused by haze and acid rain, besides being a result of the elevated power usage, have emerged as an obstacle to sustainable economic growth in China. Lowering the energy intensity (the power put to use in the production of one unit of gross domestic product (i.e., GDP)) has emerged as a key point of consideration among Chinese policy makers [1,2,3,4]. Other accountable ministries or administrations, such as domestic governments, made announcements of associated platforms, employing a battery of policies as well as steps for the fulfilment of the national objective to control the energy intensity

Methods

Results

Discussion

Conclusion