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Vertical fiscal imbalance and energy intensity in China

Author

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  • Liangliang Liu

    (Nanjing University of Finance & Economics)

  • Wenqing Zhang

    (University of Science and Technology of China)

Abstract

The effective evaluation of the factors of energy intensity (EI) at the system level has become an engaging topic in the high-quality development of the economy. However, none of the existing studies have explored the relationship between vertical fiscal imbalance (VFI) and EI systematically and deeply. In this work, Chinese provincial panel data for the period of 1998–2017 are used to analyze the influence of VFI on EI by using the spatial Durbin model. Findings demonstrate an evident spatial correlation for the effect of VFI on EI, indicating that EI in local and surrounding regions can increase as VFI improves. Results are tested for robustness using different methods. Findings further show that VFI has a positive effect on EI by improving intergovernmental fiscal transfers and hindering technological innovation. The findings of this work could help the central and provincial governments of China reduce EI problems through fiscal methods.

Suggested Citation

  • Liangliang Liu & Wenqing Zhang, 2022. "Vertical fiscal imbalance and energy intensity in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(2), pages 509-526, October.
    • Handle: RePEc:kap:enreec:v:83:y:2022:i:2:d:10.1007_s10640-022-00714-w
    DOI: 10.1007/s10640-022-00714-w
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