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Energy Price and Energy Efficiency in China: A Linear and Nonlinear Empirical Investigation

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  • Peng Hou

    (School of Economics and Management, Beijing Forestry University, Beijing 100083, China)

  • Yilin Li

    (School of Economics and Management, Beijing Forestry University, Beijing 100083, China)

  • Yong Tan

    (Department of Accounting, Finance and Economics, Huddersfield Business School, University of Huddersfield, Queensgate, Huddersfield HD1 3DH, UK)

  • Yuanjie Hou

    (School of Economics and Management, Beijing Forestry University, Beijing 100083, China)

Abstract

The empirical conclusions regarding the relationship between energy price and energy efficiency are relatively mixed. This paper systematically examines the influence of energy price on energy efficiency in China based on data from 30 provinces between 2003 and 2017, using linear and nonlinear effect analysis. We found that the impact of energy price on energy efficiency in China was positive in general. However, there existed heterogeneous effects of energy price on energy efficiency in various regions, and the effect differed with differences in energy efficiency levels based on the panel quantile regression analysis. Finally, the nonlinear effect analysis based on the panel threshold model indicated that the effect of energy price on energy efficiency increased with the rise of the environmental regulation level and economic growth rate, while it decreased with the ascent of the degree of energy price distortion and economic development level. In particular, when the value of a region’s economic development level and economic growth rate was within a certain range, the impact was not statistically significant. Overall, these findings contribute to a deeper understanding regarding the effect of energy price on energy efficiency in China.

Suggested Citation

  • Peng Hou & Yilin Li & Yong Tan & Yuanjie Hou, 2020. "Energy Price and Energy Efficiency in China: A Linear and Nonlinear Empirical Investigation," Energies, MDPI, vol. 13(16), pages 1-24, August.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:16:p:4068-:d:395290
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