Understanding the green total factor energy efficiency gap between regional manufacturing—insight from infrastructure development

Abstract

Infrastructure development and energy efficiency improvement are crucial to the high-quality transformation of the economy. However, little literature discusses how infrastructure development affects the energy efficiency gap between regional manufacturing. This paper estimates the per capita capital stock of economic infrastructure and the green total factor energy efficiency of China's manufacturing industry. Unlike the prior grouping according to geographical location or other standards, this paper conducts a data-driven clustering method and convergence analysis on energy efficiency. Thirty provinces eventually converge into four clubs, and the gaps in energy efficiency between various clubs are found to persist. The results of the panel-ordered Probit model indicate that infrastructure development can reduce regional discrepancies in manufacturing's green total factor energy efficiency. This effect is heterogeneous in transportation infrastructure and power infrastructure. As time goes on, the marginal effect of infrastructure diminishes. Moreover, the established infrastructure reduces the regional disparities in energy efficiency, while the infrastructure under construction instead widens the gap. Some relevant policy recommendations are provided for future infrastructure planning and green development strategy based on the conclusions.