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The impact of energy regulation on energy intensity and energy structure: Firm-level evidence from China

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  • Chen, Dengke
  • Chen, Shiyi
  • Jin, Hao
  • Lu, Yulin

Abstract

In this paper, we empirically investigate the impact of energy regulation on manufacturing firms' energy intensity and energy structure during 2003–2009. The identification uses the energy regulation of the 11th Five-Year Plan implemented in 2006. We show that tighter energy regulation leads to a significant energy intensity decrease and that firms switch their energy structure from using dirty fossil energy to a cleaner one. We also examine the mechanisms behind this phenomenon and find that the rising R&D inputs and increasing energy consumption ratio of high energy efficient firms are the mainly two reasons.

Suggested Citation

  • Chen, Dengke & Chen, Shiyi & Jin, Hao & Lu, Yulin, 2020. "The impact of energy regulation on energy intensity and energy structure: Firm-level evidence from China," China Economic Review, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:chieco:v:59:y:2020:i:c:s1043951x19301129
    DOI: 10.1016/j.chieco.2019.101351
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