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Total Factor Energy Efficiency of Yangtze River Delta Region in China

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  • Jiuwen Sun
  • Shanshan Li

Abstract

Energy is always the important material for economic growth and social development. A new index of energy efficiency called total factor energy efficiency (TFEE) consists of energy, capital, labor and other input that produce GDP as output. TFEE index is accounted by DEA through multiple input-output frameworks. Malmquist index measures productivity changing in two periods. Then decomposed the Malmquist index into efficiency change (EFFCH) and technical change (TECH) to estimate whether EFFCH or TECH influence TFEE. This paper analyze the energy consumption of two provinces and one city in Yangtze River Delta region, in terms of the quality of energy consumption and intensity of energy consumption. It shows that the increasing rate of energy consumption in the Yangtze River Delta was slowing down by using the absolute quantity of energy consumed in the region and its proportion in the country. Then the total factor energy efficiency of the Yangtze River Delta region was estimated by using the Yangtze River Delta region's energy consumption and economic growth data during from 1992 to 2010, based on DEA-Malmquist. The changes of total factor energy efficiency can be decomposed in energy efficiency and find the energy efficiency trends. The empirical results show that the Yangtze River Delta region, due to technological progress and technical efficiency, pulls together all the elements of energy efficiency. With time as a dimension, from 1992 to 2008, the TFEE is greater than 1, which means that the TFP is increasing and reaches the efficient frontier in the Yangtze River Delta Region. In a deeper analysis, the trend of total factor energy efficiency shows a W pattern, with the high point appearing in 1998 and 2007 by 5.4% and 5.2% respectively. And the main cause is the technical progress. With region as a dimension, from 1992 to 2008, the TFEE of the provinces and one city in the Yangtze River Delta Region are greater than 1. It indicates that the TFE climbs and reaches the efficient frontier. However, in Shanghai the TFEE is 1.060 which is the highest, followed by Jiangsu and Zhejiang.

Suggested Citation

  • Jiuwen Sun & Shanshan Li, 2014. "Total Factor Energy Efficiency of Yangtze River Delta Region in China," ERSA conference papers ersa14p799, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa14p799
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    1. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
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    1. Minglu Ma & Qiang Wang, 2022. "Assessment and Forecast of Green Total Factor Energy Efficiency in the Yellow River Basin—A Perspective Distinguishing the Upper, Middle and Lower Stream," Sustainability, MDPI, vol. 14(5), pages 1-23, February.
    2. Zhang, Dongyang & Kong, Qunxi, 2021. "How does energy policy affect firms' outward foreign direct investment: An explanation based on investment motivation and firms' performance," Energy Policy, Elsevier, vol. 158(C).
    3. Makridou, Georgia & Andriosopoulos, Kostas & Doumpos, Michael & Zopounidis, Constantin, 2016. "Measuring the efficiency of energy-intensive industries across European countries," Energy Policy, Elsevier, vol. 88(C), pages 573-583.
    4. Fazıl Gökgöz & Ercem Erkul, 2014. "Energy Efficiency Analysis For The European Countries," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 124-140.
    5. Lin, Boqiang & Sai, Rockson, 2022. "Has mining agglomeration affected energy productivity in Africa?," Energy, Elsevier, vol. 244(PA).

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    Keywords

    Energy consumption; Economic growth; Energy efficiency; DEA-Malmquist;
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