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Examining the impact of factor price distortions and social welfare on innovation efficiency from the microdata of Chinese renewable energy industry

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  • Qiao, Sen
  • Chen, Hsing Hung
  • Zhang, Rong Rong

Abstract

The marketization of factor prices is not only an important component of pricing reforms but also a decisive determinant of innovation efficiency (IE). A good social welfare (SW) system attracts talent and affects the labor market. Thus, it is important to explore the impact of factor price distortions (FPDs) and SW on IE. Based on panel data on the Chinese renewable energy industry covering 2010–2019, this paper uses the Cobb-Douglas production function to calculate FPDs, adopts stochastic frontier analysis to measure IE, and then employs the sys-GMM method for empirical testing. The empirical results show the following: 1) FPDs can significantly inhibit IE. Furthermore, if FPDs are divided into capital (CPDs) and labor price distortions (LPDs), CPDs have a greater inhibitory effect on IE than LPDs. 2) SW has a significantly negative impact on IE. Moreover, if SW is divided into SOE social welfare (SSW) and non-SOE social welfare (NSSW) on the basis of the enterprise's ownership structure, SSW is significantly negatively related to IE, while NSSW is significantly positively related to IE. 3) The moderating effects of SSW have a significantly negative impact on the relationship between FPDs and IE, while the moderating effects of NSSW have a significantly positive impact on the relationship between FPDs and IE. Based on the above research results, this paper puts forward a series of policies to improve the IE of the renewable energy industry.

Suggested Citation

  • Qiao, Sen & Chen, Hsing Hung & Zhang, Rong Rong, 2021. "Examining the impact of factor price distortions and social welfare on innovation efficiency from the microdata of Chinese renewable energy industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    • Handle: RePEc:eee:rensus:v:143:y:2021:i:c:s1364032121001957
    DOI: 10.1016/j.rser.2021.110901
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