IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v132y2019icp122-131.html
   My bibliography  Save this article

Will economic infrastructure development affect the energy intensity of China's manufacturing industry?

Author

Listed:
  • Lin, Boqiang
  • Chen, Yu

Abstract

China's manufacturing industry consumes more energy than the total amounts of Germany, Britain, France, Spain and Japan combined, and has a substantial impact on energy conservation and emissions reduction. This paper investigates the influence mechanism of economic infrastructure on the energy consumption and energy intensity of the sector. Using the China's provincial data during the period 2003–2016, the profit function is applied to incorporate infrastructure into the input-output system, and to avoid the endogenous problems caused by the reverse causal relationship between energy consumption and infrastructure construction. The empirical results indicate that economic infrastructure construction will increase energy consumption and reduce the energy intensity in the long term. Although the energy consumption effect of infrastructure in the central and western regions is less than that in the eastern region, the energy intensity of the western region declines the most due to the infrastructure construction. Based on the results of this paper, some policy implications are discussed. This paper also offers some targeted policy recommendations to improve policy design of the government.

Suggested Citation

  • Lin, Boqiang & Chen, Yu, 2019. "Will economic infrastructure development affect the energy intensity of China's manufacturing industry?," Energy Policy, Elsevier, vol. 132(C), pages 122-131.
  • Handle: RePEc:eee:enepol:v:132:y:2019:i:c:p:122-131
    DOI: 10.1016/j.enpol.2019.05.028
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421519303325
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.enpol.2019.05.028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Choi, Ki-Hong & Oh, Wankeun, 2014. "Extended Divisia index decomposition of changes in energy intensity: A case of Korean manufacturing industry," Energy Policy, Elsevier, vol. 65(C), pages 275-283.
    2. Bergman, Mats A., 1997. "The restricted profit function and the application of the generalised Leontief and the translog functional forms," International Journal of Production Economics, Elsevier, vol. 49(3), pages 249-254, May.
    3. Kurt Kratena, 2007. "Technical Change, Investment and Energy Intensity," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 295-314.
    4. Adenikinju, Adeola F, 1998. "Productivity growth and energy consumption in the Nigerian manufacturing sector: a panel data analysis," Energy Policy, Elsevier, vol. 26(3), pages 199-205, February.
    5. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    6. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
    7. Yu, Shiwei & Zheng, Shuhong & Li, Xia & Li, Longxi, 2018. "China can peak its energy-related carbon emissions before 2025: Evidence from industry restructuring," Energy Economics, Elsevier, vol. 73(C), pages 91-107.
    8. Helmut Seitz, 2000. "Infrastructure, Industrial Development, and Employment in Cities: Theoretical Aspects and Empirical Evidence," International Regional Science Review, , vol. 23(3), pages 259-280, July.
    9. Christophe Kamps, 2006. "New Estimates of Government Net Capital Stocks for 22 OECD Countries, 1960-2001," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-6.
    10. Lin, Boqiang & Chen, Yu & Zhang, Guoliang, 2018. "Impact of technological progress on China's textile industry and future energy saving potential forecast," Energy, Elsevier, vol. 161(C), pages 859-869.
    11. César Calderón & Luis Servén, 2004. "The Effects of Infrastructure Development on Growth and Income Distribution," Working Papers Central Bank of Chile 270, Central Bank of Chile.
    12. Park, Se-Hark & Dissmann, Bruno & Nam, Kee-Yung, 1993. "A cross-country decomposition analysis of manufacturing energy consumption," Energy, Elsevier, vol. 18(8), pages 843-858.
    13. Satya Paul & Balbir S. Sahni & Bagala P. Biswal, 2004. "Public Infrastructure and the Productive Performance of Canadian Manufacturing Industries," Southern Economic Journal, John Wiley & Sons, vol. 70(4), pages 998-1011, April.
    14. Lee, Myunghun & Zhang, Ning, 2012. "Technical efficiency, shadow price of carbon dioxide emissions, and substitutability for energy in the Chinese manufacturing industries," Energy Economics, Elsevier, vol. 34(5), pages 1492-1497.
    15. Sudhakara Reddy, B. & Kumar Ray, Binay, 2011. "Understanding industrial energy use: Physical energy intensity changes in Indian manufacturing sector," Energy Policy, Elsevier, vol. 39(11), pages 7234-7243.
    16. Miketa, Asami, 2001. "Analysis of energy intensity developments in manufacturing sectors in industrialized and developing countries," Energy Policy, Elsevier, vol. 29(10), pages 769-775, August.
    17. Li, Jianglong & Lin, Boqiang, 2016. "Inter-factor/inter-fuel substitution, carbon intensity, and energy-related CO2 reduction: Empirical evidence from China," Energy Economics, Elsevier, vol. 56(C), pages 483-494.
    18. Ju, Keyi & Su, Bin & Zhou, Dequn & Wu, Junmin, 2017. "Does energy-price regulation benefit China's economy and environment? Evidence from energy-price distortions," Energy Policy, Elsevier, vol. 105(C), pages 108-119.
    19. Parker, Steven & Liddle, Brantley, 2016. "Energy efficiency in the manufacturing sector of the OECD: Analysis of price elasticities," Energy Economics, Elsevier, vol. 58(C), pages 38-45.
    20. Kepplinger, D. & Templ, M. & Upadhyaya, S., 2013. "Analysis of energy intensity in manufacturing industry using mixed-effects models," Energy, Elsevier, vol. 59(C), pages 754-763.
    21. Moyo, Busani, 2013. "Power infrastructure quality and manufacturing productivity in Africa: A firm level analysis," Energy Policy, Elsevier, vol. 61(C), pages 1063-1070.
    22. Nadiri, M Ishaq & Mamuneas, Theofanis P, 1994. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 22-37, February.
    23. Demetriades, Panicos O & Mamuneas, Theofanis P, 2000. "Intertemporal Output and Employment Effects of Public Infrastructure Capital: Evidence from 12 OECD Economics," Economic Journal, Royal Economic Society, vol. 110(465), pages 687-712, July.
    24. Theriault, Louis & Sahi, Ram, 1997. "Energy intensity in the manufacturing sector: Canadian and international perspective," Energy Policy, Elsevier, vol. 25(7-9), pages 773-779.
    25. Chowdhury, Jahedul Islam & Hu, Yukun & Haltas, Ismail & Balta-Ozkan, Nazmiye & Matthew, George Jr. & Varga, Liz, 2018. "Reducing industrial energy demand in the UK: A review of energy efficiency technologies and energy saving potential in selected sectors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 1153-1178.
    26. Pradhan, Rudra P. & Bagchi, Tapan P., 2013. "Effect of transportation infrastructure on economic growth in India: The VECM approach," Research in Transportation Economics, Elsevier, vol. 38(1), pages 139-148.
    27. Garrone, Paola & Grilli, Luca, 2010. "Is there a relationship between public expenditures in energy R&D and carbon emissions per GDP? An empirical investigation," Energy Policy, Elsevier, vol. 38(10), pages 5600-5613, October.
    28. Xie, Chunping & Bai, Mengqi & Wang, Xiaolei, 2018. "Accessing provincial energy efficiencies in China’s transport sector," Energy Policy, Elsevier, vol. 123(C), pages 525-532.
    29. Hang, Leiming & Tu, Meizeng, 2007. "The impacts of energy prices on energy intensity: Evidence from China," Energy Policy, Elsevier, vol. 35(5), pages 2978-2988, May.
    30. Li, Ke & Lin, Boqiang, 2015. "The efficiency improvement potential for coal, oil and electricity in China's manufacturing sectors," Energy, Elsevier, vol. 86(C), pages 403-413.
    31. Kenneth Button, 1998. "original: Infrastructure investment, endogenous growth and economic convergence," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 32(1), pages 145-162.
    32. Chakamera, Chengete & Alagidede, Paul, 2018. "Electricity crisis and the effect of CO2 emissions on infrastructure-growth nexus in Sub Saharan Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 945-958.
    33. Sun, Chuanwang & Zhang, Wenyue & Luo, Yuan & Xu, Yonghong, 2019. "The improvement and substitution effect of transportation infrastructure on air quality: An empirical evidence from China's rail transit construction," Energy Policy, Elsevier, vol. 129(C), pages 949-957.
    34. Tan, Ruipeng & Liu, Kui & Lin, Boqiang, 2018. "Transportation infrastructure development and China’s energy intensive industries - A road development perspective," Energy, Elsevier, vol. 149(C), pages 587-596.
    35. Xie, Rui & Fang, Jiayu & Liu, Cenjie, 2017. "The effects of transportation infrastructure on urban carbon emissions," Applied Energy, Elsevier, vol. 196(C), pages 199-207.
    36. Agenor, Pierre-Richard & Moreno-Dodson, Blanca, 2006. "Public infrastructure and growth : new channels and policy implications," Policy Research Working Paper Series 4064, The World Bank.
    37. Farhadi, Minoo, 2015. "Transport infrastructure and long-run economic growth in OECD countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 74(C), pages 73-90.
    38. Hasanbeigi, Ali & Price, Lynn & Fino-Chen, Cecilia & Lu, Hongyou & Ke, Jing, 2013. "Retrospective and prospective decomposition analysis of Chinese manufacturing energy use and policy implications," Energy Policy, Elsevier, vol. 63(C), pages 562-574.
    39. Chen, Jiandong & Xu, Chong & Cui, Lianbiao & Huang, Shuo & Song, Malin, 2019. "Driving factors of CO2 emissions and inequality characteristics in China: A combined decomposition approach," Energy Economics, Elsevier, vol. 78(C), pages 589-597.
    40. Sun, Chuanwang & Ma, Tiemeng & Xu, Meilian, 2018. "Exploring the prospects of cooperation in the manufacturing industries between India and China: A perspective of embodied energy in India-China trade," Energy Policy, Elsevier, vol. 113(C), pages 643-650.
    41. Achour, Houda & Belloumi, Mounir, 2016. "Investigating the causal relationship between transport infrastructure, transport energy consumption and economic growth in Tunisia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 988-998.
    42. Harold Hotelling, 1932. "Edgeworth's Taxation Paradox and the Nature of Demand and Supply Functions," Journal of Political Economy, University of Chicago Press, vol. 40(5), pages 577-577.
    43. Alwyn Young, 2003. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1220-1261, December.
    44. Zhao, Yue & Ke, Jing & Ni, Chun Chun & McNeil, Michael & Khanna, Nina Zheng & Zhou, Nan & Fridley, David & Li, Qiqiang, 2014. "A comparative study of energy consumption and efficiency of Japanese and Chinese manufacturing industry," Energy Policy, Elsevier, vol. 70(C), pages 45-56.
    45. Luis Serven & César Calderon, 2004. "The Effects of Infrastructure Development on Growth and income," Econometric Society 2004 Latin American Meetings 173, Econometric Society.
    46. Christophe Kamps, 2006. "New Estimates of Government Net Capital Stocks for 22 OECD Countries, 1960-2001," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-6.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Yu & Lin, Boqiang, 2021. "How does infrastructure affect energy services?," Energy, Elsevier, vol. 231(C).
    2. Lin, Boqiang & Chen, Yu, 2020. "Transportation infrastructure and efficient energy services: A perspective of China's manufacturing industry," Energy Economics, Elsevier, vol. 89(C).
    3. Lin, Boqiang & Chen, Yu, 2020. "Will land transport infrastructure affect the energy and carbon dioxide emissions performance of China’s manufacturing industry?," Applied Energy, Elsevier, vol. 260(C).
    4. Chen, Yu & Lin, Boqiang, 2021. "Understanding the green total factor energy efficiency gap between regional manufacturing—insight from infrastructure development," Energy, Elsevier, vol. 237(C).
    5. Elena Cigu & Daniela Tatiana Agheorghiesei & Anca Florentina Gavriluță (Vatamanu) & Elena Toader, 2018. "Transport Infrastructure Development, Public Performance and Long-Run Economic Growth: A Case Study for the Eu-28 Countries," Sustainability, MDPI, vol. 11(1), pages 1-22, December.
    6. Tan, Ruipeng & Liu, Kui & Lin, Boqiang, 2018. "Transportation infrastructure development and China’s energy intensive industries - A road development perspective," Energy, Elsevier, vol. 149(C), pages 587-596.
    7. Silvia Bertarelli, 2006. "Public capital and growth," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
    8. Xu, Bin & Lin, Boqiang, 2016. "Reducing CO2 emissions in China's manufacturing industry: Evidence from nonparametric additive regression models," Energy, Elsevier, vol. 101(C), pages 161-173.
    9. Muhammad Javid, 2019. "Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis," Sustainability, MDPI, vol. 11(12), pages 1-22, June.
    10. Salvatore Amico Roxas & Antonio Cristofaro & Giuseppe Piroli, 2012. "Public Capital in the Private Sector of Italian Economy," EERI Research Paper Series EERI_RP_2012_19, Economics and Econometrics Research Institute (EERI), Brussels.
    11. Straub, Stephane, 2008. "Infrastructure and growth in developing countries : recent advances and research challenges," Policy Research Working Paper Series 4460, The World Bank.
    12. Timilsina,Govinda R. & Hochman,Gal & Song,Ze, 2020. "Infrastructure, Economic Growth, and Poverty : A Review," Policy Research Working Paper Series 9258, The World Bank.
    13. Trofimov, Ivan D., 2020. "Public capital and productive economy profits: evidence from OECD economies," MPRA Paper 106848, University Library of Munich, Germany.
    14. Kumari, Anita & Kumar Sharma, Anil, 2017. "Infrastructure financing and development: A bibliometric review," International Journal of Critical Infrastructure Protection, Elsevier, vol. 16(C), pages 49-65.
    15. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    16. Zhang, Yijia & Cheng, Lu, 2023. "The role of transport infrastructure in economic growth: Empirical evidence in the UK," Transport Policy, Elsevier, vol. 133(C), pages 223-233.
    17. Agénor, Pierre-Richard & Neanidis, Kyriakos C., 2015. "Innovation, public capital, and growth," Journal of Macroeconomics, Elsevier, vol. 44(C), pages 252-275.
    18. Aghion, Philippe & Akcigit, Ufuk & Cagé, Julia & Kerr, William R., 2016. "Taxation, corruption, and growth," European Economic Review, Elsevier, vol. 86(C), pages 24-51.
    19. Marie-Ange VEGANZONES-VAROUDAKIS & Arup MITRA & Chandan SHARMA, 2011. "Total Factor Productivity and Technical Efficiency of Indian Manufacturing: The Role of Infrastructure and Information & Communication Technology," Working Papers 201115, CERDI.
    20. Roberto Machado, 2017. "Crecimiento económico e infraestructura de transportes y comunicaciones en el Perú," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 40(79), pages 9-46.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:132:y:2019:i:c:p:122-131. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.