Total factor energy efficiency in Chinese manufacturing industry under industry and regional heterogeneities

Abstract

At present, there are serious problems of excessive energy consumption and carbon emissions in Chinese manufacturing industry. To solve these problems, it is of great importance to measure and improve total factor energy efficiency reasonably. At the same time, Chinese manufacturing industry differs significantly in various sub-sectors and regions, which means the prevalence of dual heterogeneity. Such strong heterogeneities can have a significant impact on the accurate measurement of total factor energy efficiency. However, it is unfortunately neglected in existing studies. In this paper, we empirically analyze the total factor energy efficiency of 19 Chinese manufacturing sub-sectors in 9 provinces from 2001 to 2011 and further analyzes its influencing factors from the perspective of the dual heterogeneity. To model industry and regional heterogeneities, we propose a three-level meta-frontier slacks-based measure (SBM) approach based on data envelopment analysis (DEA). The results show that: (1) The energy efficiency of Chinese manufacturing industry is generally low, and varies significantly across different industries and regions. Moreover, the energy inefficiency mainly comes from management inefficiency; (2) The dual heterogeneity affects the technology gap rate (TGR) deeply. The technology gap rate caused by industry heterogeneity (ITGR) is larger than that caused by regional heterogeneity (RTGR); (3) Enterprise scale, foreign direct investment, economy development level and industrial structure affect energy efficiency positively, while energy consumption structure and energy price affect energy efficiency negatively. In response to the above research findings, some policy recommendations are put forward in the end.