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Does Energy Price Induce China’s Green Energy Innovation?

Author

Listed:
  • Yue Liu

    (Institute of Finance, Guangzhou University, Guangzhou 510405, China)

  • Siming Liu

    (School of Statistics, University of International Business and Economics, Beijing 100029, China)

  • Xueying Xu

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

  • Pierre Failler

    (Economics and Finance Group, Portsmouth Business School, University of Portsmouth, Portsmouth PO1 3DE, UK)

Abstract

This paper aims to comprehensively analyze the relationship between energy price and green energy innovation in China, and first studies the impact of energy price on China’s green energy innovation, then further investigates the moderating role of energy price distortion in the price–innovation relationship, especially in the context of lagging energy marketization level in the process of China’s transition from planned economy to the market economy. Based on the data of 30 provinces in China from 2003 to 2017, this paper provides a measurement of green energy innovation capacity through the number of “alternative energy production” and “energy conservation” patents. Our results show that energy price has a significantly positive impact on China’s green energy innovation, no matter the number of green energy patent applications or the number of green energy patent grants is used as the proxy of green energy innovation capacity. However, there exists heterogeneity related to the influence of energy price on green energy innovation. Specifically, energy price has a noticeable role in promoting green energy innovation in central and western China, but not in eastern China. Further research results show that energy price distortion significantly reduces the inducing effect of energy price on green energy innovation. Meanwhile, the distortion degrees of energy price in the central and western regions of China are significantly lower than that in the eastern region, which explains to a large extent why the inducing effect of energy price on innovation is more prominent in the central and western regions.

Suggested Citation

  • Yue Liu & Siming Liu & Xueying Xu & Pierre Failler, 2020. "Does Energy Price Induce China’s Green Energy Innovation?," Energies, MDPI, vol. 13(15), pages 1-18, August.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:15:p:4034-:d:394381
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    4. Zarepour, Z. & Wagner, N., 2022. "How manufacturing firms respond to energy subsidy reforms?," ISS Working Papers - General Series 696, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
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