IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v150y2018icp241-250.html

Technological Change and Energy Efficiency in Large Chinese Firms

Author

Listed:
  • Zhu, Junming
  • Niu, Limin
  • Ruth, Matthias
  • Shi, Lei

Abstract

Technological changes will influence the extent to which China can reduce its energy consumption and carbon emissions without hampering economic development. Based on data of 580 firms in the Top-1000 Enterprise Energy Saving Program during 2006 and 2009, we differentiate between technological change embodied in new production capital and disembodied technological change. We find that both types of changes clearly led to energy efficiency. Firms of domestic ownership and higher profit were more prone to making investment with embodied technological changes. Energy efficiency rates associated with embodied technological change were higher among younger firms and those with more intensive use of energy. Energy saving associated with disembodied technological change was higher in firms of state or foreign ownership, larger scale, orientation toward domestic market, and more intensive use of energy. The findings call for the need to carefully consider the effect of different policy instruments in energy saving, and to track long-term energy statistics at the micro-level.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:ecolec:v:150:y:2018:i:c:p:241-250
    DOI: 10.1016/j.ecolecon.2018.04.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800916315440
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2018.04.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Fisher-Vanden, Karen & Jefferson, Gary H. & Liu, Hongmei & Tao, Quan, 2004. "What is driving China's decline in energy intensity?," Resource and Energy Economics, Elsevier, vol. 26(1), pages 77-97, March.
    2. Zhu, Junming & Ruth, Matthias, 2015. "Relocation or reallocation: Impacts of differentiated energy saving regulation on manufacturing industries in China," Ecological Economics, Elsevier, vol. 110(C), pages 119-133.
    3. Hulten, Charles R, 1992. "Growth Accounting When Technical Change Is Embodied in Capital," American Economic Review, American Economic Association, vol. 82(4), pages 964-980, September.
    4. Kenneth Gillingham & Richard G. Newell & Karen Palmer, 2009. "Energy Efficiency Economics and Policy," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 597-620, September.
    5. Kurt Kratena, 2007. "Technical Change, Investment and Energy Intensity," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 295-314.
    6. Ke, Jing & Price, Lynn & Ohshita, Stephanie & Fridley, David & Khanna, Nina Zheng & Zhou, Nan & Levine, Mark, 2012. "China's industrial energy consumption trends and impacts of the Top-1000 Enterprises Energy-Saving Program and the Ten Key Energy-Saving Projects," Energy Policy, Elsevier, vol. 50(C), pages 562-569.
    7. Zhu, Junming & Chertow, Marian R., 2017. "Business Strategy Under Institutional Constraints: Evidence From China's Energy Efficiency Regulations," Ecological Economics, Elsevier, vol. 135(C), pages 10-21.
    8. Mulder, Peter & de Groot, Henri L. F. & Hofkes, Marjan W., 2003. "Explaining slow diffusion of energy-saving technologies; a vintage model with returns to diversity and learning-by-using," Resource and Energy Economics, Elsevier, vol. 25(1), pages 105-126, February.
    9. Fisher-Vanden, Karen & Jefferson, Gary H. & Jingkui, Ma & Jianyi, Xu, 2006. "Technology development and energy productivity in China," Energy Economics, Elsevier, vol. 28(5-6), pages 690-705, November.
    10. Geller, Howard & Harrington, Philip & Rosenfeld, Arthur H. & Tanishima, Satoshi & Unander, Fridtjof, 2006. "Polices for increasing energy efficiency: Thirty years of experience in OECD countries," Energy Policy, Elsevier, vol. 34(5), pages 556-573, March.
    11. Brynhildur Davidsdottir & Matthias Ruth, 2005. "Pulp Nonfiction: Regionalized Dynamic Model of the U.S. Pulp and Paper Industry," Journal of Industrial Ecology, Yale University, vol. 9(3), pages 191-211, July.
    12. Liao, Hua & Fan, Ying & Wei, Yi-Ming, 2007. "What induced China's energy intensity to fluctuate: 1997-2006?," Energy Policy, Elsevier, vol. 35(9), pages 4640-4649, September.
    13. Ma, Chunbo & Stern, David I., 2008. "China's changing energy intensity trend: A decomposition analysis," Energy Economics, Elsevier, vol. 30(3), pages 1037-1053, May.
    14. Price, Lynn & Levine, Mark D. & Zhou, Nan & Fridley, David & Aden, Nathaniel & Lu, Hongyou & McNeil, Michael & Zheng, Nina & Qin, Yining & Yowargana, Ping, 2011. "Assessment of China's energy-saving and emission-reduction accomplishments and opportunities during the 11th Five Year Plan," Energy Policy, Elsevier, vol. 39(4), pages 2165-2178, April.
    15. Fisher-Vanden, Karen & Jefferson, Gary H., 2008. "Technology diversity and development: Evidence from China's industrial enterprises," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 658-672, December.
    16. Sue Wing, Ian, 2008. "Explaining the declining energy intensity of the U.S. economy," Resource and Energy Economics, Elsevier, vol. 30(1), pages 21-49, January.
    17. repec:aen:journl:1993v14-01-a02 is not listed on IDEAS
    18. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc.
    19. Zhu Liu & Dabo Guan & Wei Wei & Steven J. Davis & Philippe Ciais & Jin Bai & Shushi Peng & Qiang Zhang & Klaus Hubacek & Gregg Marland & Robert J. Andres & Douglas Crawford-Brown & Jintai Lin & Hongya, 2015. "Reduced carbon emission estimates from fossil fuel combustion and cement production in China," Nature, Nature, vol. 524(7565), pages 335-338, August.
    20. You, Jong Keun, 1976. "Embodied and Disembodied Technical Progress in the United States, 1929-1968," The Review of Economics and Statistics, MIT Press, vol. 58(1), pages 123-127, February.
    21. repec:aen:journl:1990v11-02-a09 is not listed on IDEAS
    22. Popp, David & Newell, Richard G. & Jaffe, Adam B., 2010. "Energy, the Environment, and Technological Change," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 873-937, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xun Liu & Xiaoliang Yu & Simon Gao, 2019. "A quantitative study of financing efficiency of low‐carbon companies: A three‐stage data envelopment analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 858-871, July.
    2. Yu Feng & Yutao Lei, 2025. "Carbon trading price and carbon performance of high energy‐intensive enterprises," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(1), pages 489-501, January.
    3. Zhang, Dayong & Li, Jun & Ji, Qiang, 2020. "Does better access to credit help reduce energy intensity in China? Evidence from manufacturing firms," Energy Policy, Elsevier, vol. 145(C).
    4. Zhou, Qianling & Li, Tao & Gong, Liutang, 2022. "The effect of tax incentives on energy intensity: Evidence from China's VAT reform," Energy Economics, Elsevier, vol. 108(C).
    5. Zhang, Yijun & Song, Yi, 2020. "Unified efficiency of coal mining enterprises in China: An analysis based on meta-frontier non-radial directional distance functions," Resources Policy, Elsevier, vol. 65(C).
    6. Yuan, Gecheng & Ye, Qin & Sun, Yongping, 2021. "Financial innovation, information screening and industries’ green innovation — Industry-level evidence from the OECD," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    7. Zhou, P. & Zhang, H. & Zhang, L.P., 2022. "The drivers of energy intensity changes in Chinese cities: A production-theoretical decomposition analysis," Applied Energy, Elsevier, vol. 307(C).
    8. Hou, Xiaojuan & Xiang, Ruojun, 2025. "Exploring the influence of extreme heat on corporate energy efficiency," Journal of Asian Economics, Elsevier, vol. 97(C).
    9. Juraj Šebo & Jasna Prester & Miriam Šebová, 2023. "The Role of Environmental Management Systems and Energy Management Systems in the Adoption of Energy Recuperation Technologies in Central European Manufacturing Companies," Sustainability, MDPI, vol. 15(24), pages 1-18, December.
    10. Zha, Donglan & Yang, Guanglei & Wang, Qunwei, 2019. "Investigating the driving factors of regional CO2 emissions in China using the IDA-PDA-MMI method," Energy Economics, Elsevier, vol. 84(C).
    11. Da Gao & Xinlin Mo & Ruochan Xiong & Zhiliang Huang, 2022. "Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China’s VAT Reform," IJERPH, MDPI, vol. 19(15), pages 1-17, July.
    12. Yang, Zhenbing & Shao, Shuai & Fan, Meiting & Yang, Lili, 2021. "Wage distortion and green technological progress: A directed technological progress perspective," Ecological Economics, Elsevier, vol. 181(C).
    13. Xiekui Zhang & Peiyao Liu & Hongfei Zhu, 2022. "The Impact of Industrial Intelligence on Energy Intensity: Evidence from China," Sustainability, MDPI, vol. 14(12), pages 1-16, June.
    14. Zhou, Yuanqi & Yang, Jinqiang & Jia, Zhijie, 2023. "Optimizing energy efficiency investments in steel firms: A real options model considering carbon trading and tax cuts during challenging economic conditions," Resources Policy, Elsevier, vol. 85(PA).
    15. Xu, Jiangchuan & Wang, En-Ze, 2024. "The path to energy savings and CO2 emission reductions in China's industrial sector from the perspective of factor price distortions correction - Based on an extended capital vintage model," Energy, Elsevier, vol. 313(C).
    16. Shangguan, Yiwen & Feng, Qiyangfan, 2024. "Environmental bonuses of employment protection: Evidence from labor contract law in China," Energy Economics, Elsevier, vol. 129(C).
    17. Zhang, Yixiang & Zhou, Weiyi & Liu, Meiling, 2022. "Driving factors of enterprise energy-saving and emission reduction behaviors," Energy, Elsevier, vol. 256(C).
    18. Pal, Kalyani & Mukhopadhyay, Jyoti Prasad & Bhagawan, Praveen, 2024. "Does cap-and-trade scheme impact energy efficiency and firm value? Empirical evidence from India," Energy Economics, Elsevier, vol. 134(C).
    19. Popkova, Elena G. & Sergi, Bruno S., 2021. "Energy efficiency in leading emerging and developed countries," Energy, Elsevier, vol. 221(C).
    20. Qiaoyi Chen & Zhao Chen & Zhikuo Liu & Juan Carlos Suárez Serrato & Daniel Yi Xu, 2025. "Regulating Conglomerates: Evidence from an Energy Conservation Program in China," American Economic Review, American Economic Association, vol. 115(2), pages 408-447, February.
    21. Zhou, Qianling & Cui, Xiaoyong & Ni, Hongfu & Gong, Liutang, 2022. "The impact of environmental regulation policy on firms' energy-saving behavior: A quasi-natural experiment based on China's low-carbon pilot city policy," Resources Policy, Elsevier, vol. 76(C).
    22. Yang, Zhenbing & Hao, Chunyan & Shao, Shuai & Chen, Zhuo & Yang, Lili, 2022. "Appropriate technology and energy security: From the perspective of biased technological change," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    23. Safarzadeh, Soroush & Rasti-Barzoki, Morteza & Hejazi, Seyed Reza, 2020. "A review of optimal energy policy instruments on industrial energy efficiency programs, rebound effects, and government policies," Energy Policy, Elsevier, vol. 139(C).
    24. Li, Yuanshun & Liu, Liang & Li, Xinyuan & Zhang, Aoran, 2025. "From social networks to sustainable solutions: Unpacking the influence of social capital on green innovation," China Economic Review, Elsevier, vol. 93(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Ke & Lin, Boqiang, 2018. "How to promote energy efficiency through technological progress in China?," Energy, Elsevier, vol. 143(C), pages 812-821.
    2. Herrerias, M.J. & Cuadros, A. & Luo, D., 2016. "Foreign versus indigenous innovation and energy intensity: Further research across Chinese regions," Applied Energy, Elsevier, vol. 162(C), pages 1374-1384.
    3. Chen, Xiude & Qin, Quande & Wei, Y.-M., 2016. "Energy productivity and Chinese local officials’ promotions: Evidence from provincial governors," Energy Policy, Elsevier, vol. 95(C), pages 103-112.
    4. Le Tang, 2020. "Energy prices and investment in energy efficiency: evidence from Chinese industry 1997–2004," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 34(2), pages 93-105, November.
    5. Jiang, Lei & Folmer, Henk & Ji, Minhe, 2014. "The drivers of energy intensity in China: A spatial panel data approach," China Economic Review, Elsevier, vol. 31(C), pages 351-360.
    6. Li, Yi & Sun, Linyan & Feng, Taiwen & Zhu, Chunyan, 2013. "How to reduce energy intensity in China: A regional comparison perspective," Energy Policy, Elsevier, vol. 61(C), pages 513-522.
    7. Gillingham, Kenneth & Newell, Richard G. & Pizer, William A., 2008. "Modeling endogenous technological change for climate policy analysis," Energy Economics, Elsevier, vol. 30(6), pages 2734-2753, November.
    8. Herrerias, M.J. & Cuadros, A. & Orts, V., 2013. "Energy intensity and investment ownership across Chinese provinces," Energy Economics, Elsevier, vol. 36(C), pages 286-298.
    9. Li, Ke & Lin, Boqiang, 2014. "The nonlinear impacts of industrial structure on China's energy intensity," Energy, Elsevier, vol. 69(C), pages 258-265.
    10. Wan, Jun & Baylis, Kathy & Mulder, Peter, 2015. "Trade-facilitated technology spillovers in energy productivity convergence processes across EU countries," Energy Economics, Elsevier, vol. 48(C), pages 253-264.
    11. Junming Zhu & Marian R. Chertow, 2019. "Authoritarian but responsive: Local regulation of industrial energy efficiency in Jiangsu, China," Regulation & Governance, John Wiley & Sons, vol. 13(3), pages 384-404, September.
    12. Popp, David & Newell, Richard G. & Jaffe, Adam B., 2010. "Energy, the Environment, and Technological Change," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 873-937, Elsevier.
    13. Kounetas, Konstantinos & Stergiou, Eirini, 2019. "Technology heterogeneity in European industries' energy efficiency performance. The role of climate, greenhouse gases, path dependence and energy mix," MPRA Paper 92314, University Library of Munich, Germany.
    14. Song, Feng & Zheng, Xinye, 2012. "What drives the change in China's energy intensity: Combining decomposition analysis and econometric analysis at the provincial level," Energy Policy, Elsevier, vol. 51(C), pages 445-453.
    15. repec:aen:journl:ej37-3-broadstock is not listed on IDEAS
    16. Löschel, Andreas & Pothen, Frank & Schymura, Michael, 2015. "Peeling the onion: Analyzing aggregate, national and sectoral energy intensity in the European Union," Energy Economics, Elsevier, vol. 52(S1), pages 63-75.
    17. Zheng, Yingmei & Qi, Jianhong & Chen, Xiaoliang, 2011. "The effect of increasing exports on industrial energy intensity in China," Energy Policy, Elsevier, vol. 39(5), pages 2688-2698, May.
    18. Hong, Junjie & Shi, Fangyuan & Zheng, Yuhan, 2023. "Does network infrastructure construction reduce energy intensity? Based on the “Broadband China” strategy," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    19. Voigt, Sebastian & De Cian, Enrica & Schymura, Michael & Verdolini, Elena, 2014. "Energy intensity developments in 40 major economies: Structural change or technology improvement?," Energy Economics, Elsevier, vol. 41(C), pages 47-62.
    20. Yuan, Chaoqing & Liu, Sifeng & Fang, Zhigeng & Wu, Junlong, 2009. "Research on the energy-saving effect of energy policies in China: 1982-2006," Energy Policy, Elsevier, vol. 37(7), pages 2475-2480, July.
    21. repec:aen:journl:ej37-si1-zhang is not listed on IDEAS
    22. Feng, Taiwen & Sun, Linyan & Zhang, Ying, 2009. "The relationship between energy consumption structure, economic structure and energy intensity in China," Energy Policy, Elsevier, vol. 37(12), pages 5475-5483, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:150:y:2018:i:c:p:241-250. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.