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The energy efficiency advantage of foreign-invested enterprises in China and the role of structural differences

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  • Jiang, Xuemei
  • Zhu, Kunfu
  • Green, Christopher

Abstract

In this paper, we use a unique input–output table that distinguishes trade mode and firm ownership to discuss the relative advantage of foreign-invested enterprises (FIEs) in Mainland China. It is found that FIEs outperform Chinese owned enterprises (COEs) in terms of total energy intensity by 16.97%, 14.97% and 42.89%, respectively, for the processing, non-processing and overall production in the industrial sector. Further decompositions show that structural differences across industries (and trade mode) contribute positively and account for 65.33%, 26.28% and 81.93% of the relative advantage of FIEs for processing, non-processing and overall production. Failure to capture heterogeneity across trade mode may lead to distortion of the picture of how final demand structure differences influence the energy efficiency advantage of FIEs over COEs in China.

Suggested Citation

  • Jiang, Xuemei & Zhu, Kunfu & Green, Christopher, 2015. "The energy efficiency advantage of foreign-invested enterprises in China and the role of structural differences," China Economic Review, Elsevier, vol. 34(C), pages 225-235.
    • Handle: RePEc:eee:chieco:v:34:y:2015:i:c:p:225-235
    DOI: 10.1016/j.chieco.2014.11.009
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    More about this item

    Keywords

    Total energy intensity; Foreign-invested enterprises; Chinese owned enterprises; Final demand structure; Input–output table;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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