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Technical Change, Investment and Energy Intensity

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  • Kurt Kratena

Abstract

This paper analyses the role of different components of technical change on energy intensity by applying a Translog variable cost function setting with (short- run) fixed capital to the new EU KLEMS dataset for five selected EU countries (Denmark, Italy, Netherlands, UK and Spain). The framework applied represents an accounting of technical change components, comprising autonomous (disembodied) as well as technical change embodied in capital goods. It is extended in order to incorporate embodied technical change induced by energy prices by adding an equation for (physical) capital stock accumulation. The model can be used for explaining and tracing back the long-run impact of the interaction of prices, capital accumulation and technical change on energy intensity. The empirical results distinguish between industries with embodied technical change and industries with capital-energy complementarity.

Suggested Citation

  • Kurt Kratena, 2007. "Technical Change, Investment and Energy Intensity," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 295-314.
    • Handle: RePEc:taf:ecsysr:v:19:y:2007:i:3:p:295-314
    DOI: 10.1080/09535310701572008
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    1. Gilbert E. Metcalf, 2006. "Energy Conservation in the United States: Understanding its Role in Climate Policy," Discussion Papers Series, Department of Economics, Tufts University 0609, Department of Economics, Tufts University.
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    Cited by:

    1. Suh, Dong Hee, 2015. "Identifying Factor Substitution and Energy Intensity in the U.S. Agricultural Sector," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205264, Agricultural and Applied Economics Association.
    2. Axenbeck, Janna & Niebel, Thomas, 2021. "Climate Protection Potentials of Digitalized Production Processes: Microeconometric Evidence," 23rd ITS Biennial Conference, Online Conference / Gothenburg 2021. Digital societies and industrial transformations: Policies, markets, and technologies in a post-Covid world 238007, International Telecommunications Society (ITS).
    3. 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.
    4. Dong Hee Suh, 2015. "Declining Energy Intensity in the U.S. Agricultural Sector: Implications for Factor Substitution and Technological Change," Sustainability, MDPI, vol. 7(10), pages 1-14, September.
    5. 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.
    6. Wurlod, Jules-Daniel & Noailly, Joëlle, 2018. "The impact of green innovation on energy intensity: An empirical analysis for 14 industrial sectors in OECD countries," Energy Economics, Elsevier, vol. 71(C), pages 47-61.
    7. Patrick Schulte & Heinz Welsch & Sascha Rexhäuser, 2016. "ICT and the Demand for Energy: Evidence from OECD Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(1), pages 119-146, January.
    8. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages 374-403, June.
    9. International Monetary Fund, 2010. "Islamic Republic of Iran: Selected Issues Paper," IMF Staff Country Reports 2010/076, International Monetary Fund.
    10. Zhu, Junming & Niu, Limin & Ruth, Matthias & Shi, Lei, 2018. "Technological Change and Energy Efficiency in Large Chinese Firms," Ecological Economics, Elsevier, vol. 150(C), pages 241-250.
    11. Fan, Maoqing & Zheng, Haitao, 2019. "The impact of factor price changes and technological progress on the energy intensity of China's industries: Kalman filter-based econometric method," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 340-353.
    12. Xiaoli Hao & Xinhui Wang & Haitao Wu & Yu Hao, 2023. "Path to sustainable development: Does digital economy matter in manufacturing green total factor productivity?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 360-378, February.
    13. Kurt Kratena & Ina Meyer, 2007. "Energieverbrauch und CO2-Emissionen in Österreich. Die Rolle von Energieeffizienz und Energieträgersubstitution," WIFO Monatsberichte (monthly reports), WIFO, vol. 80(11), pages 893-907, November.
    14. Lagomarsino, Elena, 2020. "Estimating elasticities of substitution with nested CES production functions: Where do we stand?," Energy Economics, Elsevier, vol. 88(C).
    15. Xu, Zhen & Das, Debasish Kumar & Guo, Wei & Wei, Wendong, 2021. "Does power grid infrastructure stimulate regional economic growth?," Energy Policy, Elsevier, vol. 155(C).

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