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Energy prices and investment in energy efficiency: evidence from Chinese industry 1997–2004

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  • Le Tang

Abstract

The paper develops and implements a methodology for assessing the role of energy prices and new investment in reducing energy intensity in Chinese industry. Analysing a unique panel data set which reports firm‐level energy consumption and price from 1997 to 2004, the paper finds: the energy prices, not only the current but also the past energy prices, are key factors that driving down firms' energy intensity for all three types of firms: state‐owned enterprises (SOEs), domestic non‐SOEs (NSOEs) and foreign‐funded firms (FFEs); furthermore, SOEs exhibit a robust price‐investment channel: responding to rising energy prices, SOEs tend to invest in new energy‐efficient capital, through which SOEs reduce energy intensity; the same price‐investment channels are less robust for non‐SOEs or foreign‐funded firms.

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  • Le Tang, 2020. "Energy prices and investment in energy efficiency: evidence from Chinese industry 1997–2004," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 34(2), pages 93-105, November.
    • Handle: RePEc:bla:apacel:v:34:y:2020:i:2:p:93-105
    DOI: 10.1111/apel.12301
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    Cited by:

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    2. Tang, Le, 2021. "Investment dynamics and capital distortion: State and non-state firms in China," Journal of Asian Economics, Elsevier, vol. 73(C).
    3. Wu, Anbing & Chen, Junying & Zhang, Yanyan, 2023. "Natural resources and energy resources prices an answer to energy insecurity? The role of mineral, forest, coal resources and financial development," Resources Policy, Elsevier, vol. 87(PA).
    4. Cristian Mardones & Pablo Herreros, 2023. "Ex post evaluation of voluntary environmental policies on the energy intensity in Chilean firms," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 9111-9136, September.
    5. Tang, Le & Jefferson, Gary, 2024. "A DSGE model of energy efficiency with vintage capital in Chinese industry," Economic Modelling, Elsevier, vol. 132(C).
    6. Tang, Le, 2022. "The dynamic demand for capital and labor: Evidence from Chinese industrial firms," Economic Modelling, Elsevier, vol. 107(C).

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