IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v11y2024i1d10.1057_s41599-024-02918-5.html
   My bibliography  Save this article

Poison or catalyst? How do energy saving targets matter for firm-level productivity in China

Author

Listed:
  • Pan Zhang

    (Shanghai Jiao Tong University, China Institute for Urban Governance, Shanghai Jiao Tong University)

  • Acheng Zhang

    (Central China Normal University)

  • Zitao Chen

    (Shanghai Jiao Tong University)

Abstract

China’s Top-10000 Enterprises Energy Conservation and Low Carbon Program, enacted in 2011, sets binding energy saving targets for enterprises. However, whether energy saving target setting is a poison or a catalyst remains controversial, and no research has been conducted on how the targets affect enterprises’ total factor productivity. We construct 2012–2013 panel data models by mapping the enterprises subject to the energy saving targets onto the China Industrial Enterprise Database to systematically quantify the effects of the targets on enterprises’ total factor productivity. The study reveals an inverted-U-shaped curve between energy saving targets and manufacturers’ total factor productivity. We also find that the targets boost an enterprise’s total factor productivity by expanding the enterprise’s market share and their impacts vary according to region, type of enterprise, and industry. The study shows that setting appropriate energy saving targets can improve the environment and boost enterprise productivity.

Suggested Citation

  • Pan Zhang & Acheng Zhang & Zitao Chen, 2024. "Poison or catalyst? How do energy saving targets matter for firm-level productivity in China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    • Handle: RePEc:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-024-02918-5
    DOI: 10.1057/s41599-024-02918-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-024-02918-5
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-024-02918-5?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. Gabriel Felbermayr & Benjamin Jung, 2018. "Market size and TFP in the Melitz model," Review of International Economics, Wiley Blackwell, vol. 26(4), pages 869-891, September.
    2. Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-583, April.
    3. Fischer, Carolyn & Springborn, Michael, 2011. "Emissions targets and the real business cycle: Intensity targets versus caps or taxes," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 352-366.
    4. Philippe Aghion & Jing Cai & Mathias Dewatripont & Luosha Du & Ann Harrison & Patrick Legros, 2022. "Industrial Policy and Competition," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 15, pages 349-380, World Scientific Publishing Co. Pte. Ltd..
    5. Jiang, Yufan & Wang, Hongyan & Liu, Zuankuo, 2021. "The impact of the free trade zone on green total factor productivity ——evidence from the shanghai pilot free trade zone," Energy Policy, Elsevier, vol. 148(PB).
    6. Xueqing Wang & Yuan Chen & Bingsheng Liu & Yinghua Shen & Hui Sun, 2013. "A total factor productivity measure for the construction industry and analysis of its spatial difference: a case study in China," Construction Management and Economics, Taylor & Francis Journals, vol. 31(10), pages 1059-1071, October.
    7. Wang, Derek & Li, Shanling & Sueyoshi, Toshiyuki, 2014. "DEA environmental assessment on U.S. Industrial sectors: Investment for improvement in operational and environmental performance to attain corporate sustainability," Energy Economics, Elsevier, vol. 45(C), pages 254-267.
    8. Scott L. Baier & Gerald P. Dwyer & Robert Tamura, 2006. "How Important are Capital and Total Factor Productivity for Economic Growth?," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 23-49, January.
    9. Gale, Bradley T, 1972. "Market Share and Rate of Return," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 412-423, November.
    10. Ilke Van Beveren, 2012. "Total Factor Productivity Estimation: A Practical Review," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 98-128, February.
    11. Bernini, Cristina & Cerqua, Augusto & Pellegrini, Guido, 2017. "Public subsidies, TFP and efficiency: A tale of complex relationships," Research Policy, Elsevier, vol. 46(4), pages 751-767.
    12. Zhengxia He & Shichun Xu & Wenxing Shen & Meiling Wang & Cunfang Li, 2019. "Exploring external and internal pressures on the environmental behavior of paper enterprises in China: A qualitative study," Business Strategy and the Environment, Wiley Blackwell, vol. 28(6), pages 951-969, September.
    13. Hongbin Cai & Qiao Liu, 2009. "Competition and Corporate Tax Avoidance: Evidence from Chinese Industrial Firms," Economic Journal, Royal Economic Society, vol. 119(537), pages 764-795, April.
    14. Xiao Tang & Zhengwen Liu & Hongtao Yi, 2016. "Mandatory Targets and Environmental Performance: An Analysis Based on Regression Discontinuity Design," Sustainability, MDPI, vol. 8(9), pages 1-16, September.
    15. Conrad, Klaus & Wastl, Dieter, 1995. "The Impact of Environmental Regulation on Productivity in German Industries," Empirical Economics, Springer, vol. 20(4), pages 615-633.
    16. Rhoades, Stephen A., 1985. "Market share as a source of market power: Implications and some evidence," Journal of Economics and Business, Elsevier, vol. 37(4), pages 343-363, December.
    17. Laura Alfaro & Sebnem Kalemli‐Ozcan & Selin Sayek, 2009. "FDI, Productivity and Financial Development," The World Economy, Wiley Blackwell, vol. 32(1), pages 111-135, January.
    18. Zhao, Xiaofan & Li, Huimin & Wu, Liang & Qi, Ye, 2014. "Implementation of energy-saving policies in China: How local governments assisted industrial enterprises in achieving energy-saving targets," Energy Policy, Elsevier, vol. 66(C), pages 170-184.
    19. Xie, Rong-hui & Yuan, Yi-jun & Huang, Jing-jing, 2017. "Different Types of Environmental Regulations and Heterogeneous Influence on “Green” Productivity: Evidence from China," Ecological Economics, Elsevier, vol. 132(C), pages 104-112.
    20. Zhang, Pan & Wang, Huan, 2022. "Do provincial energy policies and energy intensity targets help reduce CO2 emissions? Evidence from China," Energy, Elsevier, vol. 245(C).
    21. Filippini, Massimo & Geissmann, Thomas & Karplus, Valerie J. & Zhang, Da, 2020. "The productivity impacts of energy efficiency programs in developing countries: Evidence from iron and steel firms in China," China Economic Review, Elsevier, vol. 59(C).
    22. Rietbergen, Martijn G. & Blok, Kornelis, 2010. "Setting SMART targets for industrial energy use and industrial energy efficiency," Energy Policy, Elsevier, vol. 38(8), pages 4339-4354, August.
    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. Nathaniel Lane, 2020. "The New Empirics of Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 20(2), pages 209-234, June.
    2. Segundo Camino‐Mogro & Natalia Bermudez‐Barrezueta, 2021. "Productivity determinants in the construction sector in emerging country: New evidence from Ecuadorian firms," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2391-2413, November.
    3. Zhang, Yijun & Li, Xiaoping & Song, Yi & Jiang, Feitao, 2021. "Can green industrial policy improve total factor productivity? Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 51-62.
    4. Lin, Benxi & Du, Ruiying & Dong, Zekuan & Jin, Shaosheng & Liu, Weipin, 2020. "The impact of foreign direct investment on the productivity of the Chinese forest products industry," Forest Policy and Economics, Elsevier, vol. 111(C).
    5. Sangeeta Bansal & Massimo Filippini & Suchita Srinivasan, 2023. "How Regulation Might Fail to Reduce Energy Consumption While Still Stimulating Total Factor Productivity Growth," CER-ETH Economics working paper series 23/379, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    6. Mendez-Guerra, Carlos, 2020. "Labor Productivity, Capital Accumulation, and Aggregate Efficiency Across Countries: New Evidence for an Old Debate," MPRA Paper 99268, University Library of Munich, Germany.
    7. Yong Geng & Wei Liu & Hanshu Chen & Xinyu Zou, 2023. "The Spillover Effects of Environmental Regulations: A Perspective of Chinese Unregulated Firms' Tax Burden," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(2), pages 84-111, March.
    8. Hu, Shan & Yu, Yongze & Fei, Qingyu, 2023. "Social credit and patent quality: Evidence from China," Journal of Asian Economics, Elsevier, vol. 84(C).
    9. Lin Gan & Takahashi Yoshifumi & Nomura Hisako & Yabe Mitsuyasu, 2024. "The short‐ and long‐term impacts of overinvestments on the profitability of agri‐food processing firms in China," Agribusiness, John Wiley & Sons, Ltd., vol. 40(1), pages 227-247, January.
    10. Lin, Gan & Takahashi, Yoshifumi & Nomura, Hisako & Yabe, Mitsuyasu, 2022. "Policy incentives, ownership effects, and firm productivity—Evidence from China’s Agricultural Leading Firms Program," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 845-859.
    11. Yi Li & Lili Ding & Yongliang Yang, 2020. "Can the Introduction of an Environmental Target Assessment Policy Improve the TFP of Textile Enterprises? A Quasi-Natural Experiment Based on the Huai River Basin in China," Sustainability, MDPI, vol. 12(4), pages 1-19, February.
    12. Huynh, Linh & Hoang, Hien & Tran, Hung, 2020. "Does FDI enhance provincial productivity? A panel data analysis in Vietnam," MPRA Paper 117620, University Library of Munich, Germany, revised Aug 2021.
    13. Li, Mingyang & Jin, Man & Kumbhakar, Subal C., 2022. "Do subsidies increase firm productivity? Evidence from Chinese manufacturing enterprises," European Journal of Operational Research, Elsevier, vol. 303(1), pages 388-400.
    14. Prabal De & Priya Nagaraj, 2014. "Productivity and firm size in India," Small Business Economics, Springer, vol. 42(4), pages 891-907, April.
    15. Fang, Jing & He, Hui & Li, Nan, 2020. "China's rising IQ (Innovation Quotient) and growth: Firm-level evidence," Journal of Development Economics, Elsevier, vol. 147(C).
    16. Xie, Ronghui & Teo, Thompson S.H., 2022. "Green technology innovation, environmental externality, and the cleaner upgrading of industrial structure in China — Considering the moderating effect of environmental regulation," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    17. Bessonova, Evguenia, 2023. "Firms’ efficiency, exits and government procurement contracts," European Journal of Political Economy, Elsevier, vol. 76(C).
    18. Shiwen Liu & Zhong Zhang & Guangyao Xu & Zhen Zhang & Hongyuan Li, 2021. "How Promotion Incentives and Environmental Regulations Affect China’s Environmental Pollution?," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    19. Lin Ma & Qinchuan Du & Tian Wu, 2019. "Government Intervention and Automobile Industry Structure: Theory and Evidence from China," Sustainability, MDPI, vol. 11(17), pages 1-25, August.
    20. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).

    More about this item

    Statistics

    Access and download statistics

    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:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-024-02918-5. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    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.