IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v183y2023ics030142152300410x.html
   My bibliography  Save this article

Corruption induced energy inefficiencies: Evidence from China's energy investment projects

Author

Listed:
  • Liu, Jie
  • Qian, Haoqi
  • Zhang, Qian
  • Lin, Zhiyan
  • Siano, Pierluigi

Abstract

China is currently having a lot of conversations about energy and corruption. This research explores how corruption and energy investment affect energy efficiency by employing statistical methodologies and analyzing data spanning from 2000 to 2017. The research findings indicate that corruption has a detrimental effect on energy efficiency. Further analysis reveals that energy investment acts as a mediator in this relationship. The influence of corruption on energy efficiency varies depending on the endowment of energy resources and the level of performance pressure. Regions with lower endowments of energy resources experience a greater detrimental impact of corruption on energy efficiency. However, in regions with higher endowments of energy resources, energy investment has a complete mediating effect. In regions with lower performance pressure, corruption significantly reduces energy efficiency, whereas, in regions with higher performance pressure, the mediating role of energy investment is more prominent. The approval system reform in the energy investment sector since 2013 has reduced the adverse impact of corruption on energy investment and, consequently, on energy efficiency. These research findings offer valuable insights for the Chinese government to address shortcomings, combat corruption in the energy sector, optimize energy investment, and enhance energy efficiency further.

Suggested Citation

  • Liu, Jie & Qian, Haoqi & Zhang, Qian & Lin, Zhiyan & Siano, Pierluigi, 2023. "Corruption induced energy inefficiencies: Evidence from China's energy investment projects," Energy Policy, Elsevier, vol. 183(C).
    • Handle: RePEc:eee:enepol:v:183:y:2023:i:c:s030142152300410x
    DOI: 10.1016/j.enpol.2023.113825
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142152300410X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2023.113825?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Lin, Kun-Chin & Purra, Mika M., 2019. "Transforming China's electricity sector: Politics of institutional change and regulation," Energy Policy, Elsevier, vol. 124(C), pages 401-410.
    2. Diego Restuccia & Richard Rogerson, 2017. "The Causes and Costs of Misallocation," Journal of Economic Perspectives, American Economic Association, vol. 31(3), pages 151-174, Summer.
    3. Song, Chang-Qing & Chang, Chun-Ping & Gong, Qiang, 2021. "Economic growth, corruption, and financial development: Global evidence," Economic Modelling, Elsevier, vol. 94(C), pages 822-830.
    4. Liu, Haomin & Zhang, Zaixu & Zhang, Tao & Wang, Liyang, 2020. "Revisiting China’s provincial energy efficiency and its influencing factors," Energy, Elsevier, vol. 208(C).
    5. Ang, B.W. & Mu, A.R. & Zhou, P., 2010. "Accounting frameworks for tracking energy efficiency trends," Energy Economics, Elsevier, vol. 32(5), pages 1209-1219, September.
    6. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    7. Méon, Pierre-Guillaume & Weill, Laurent, 2010. "Is Corruption an Efficient Grease?," World Development, Elsevier, vol. 38(3), pages 244-259, March.
    8. Huang, Junbing & Xiang, Shiqi & Wu, Panling & Chen, Xiang, 2022. "How to control China's energy consumption through technological progress: A spatial heterogeneous investigation," Energy, Elsevier, vol. 238(PC).
    9. Yang, Mian & Yang, Fuxia & Sun, Chuanwang, 2018. "Factor market distortion correction, resource reallocation and potential productivity gains: An empirical study on China's heavy industry sector," Energy Economics, Elsevier, vol. 69(C), pages 270-279.
    10. Pan, Xiongfeng & Ai, Bowei & Li, Changyu & Pan, Xianyou & Yan, Yaobo, 2019. "Dynamic relationship among environmental regulation, technological innovation and energy efficiency based on large scale provincial panel data in China," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 428-435.
    11. Chang, Chun Ping & Berdiev, Aziz N., 2011. "The political economy of energy regulation in OECD countries," Energy Economics, Elsevier, vol. 33(5), pages 816-825, September.
    12. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    13. Huang, Xiaoling & Tian, Peng, 2023. "Polluting thy neighbor or benefiting thy neighbor: Effects of the clean energy development on haze pollution in China," Energy, Elsevier, vol. 268(C).
    14. Yuna Heo & Fangfang Hou & Seongkyu Gilbert Park, 2021. "Does corruption grease or sand the wheels of investment or innovation? Different effects in advanced and emerging economies," Applied Economics, Taylor & Francis Journals, vol. 53(1), pages 35-60, January.
    15. Chang, Chun-Ping & Wen, Jun & Zheng, Mingbo & Dong, Minyi & Hao, Yu, 2018. "Is higher government efficiency conducive to improving energy use efficiency? Evidence from OECD countries," Economic Modelling, Elsevier, vol. 72(C), pages 65-77.
    16. Qing Liu & Ruosi Lu & Xiangjun Ma, 2015. "Corruption, Financial Resources and Exports," Review of International Economics, Wiley Blackwell, vol. 23(5), pages 1023-1043, November.
    17. Song, Malin & Xie, Qianjiao & Shen, Zhiyang, 2021. "Impact of green credit on high-efficiency utilization of energy in China considering environmental constraints," Energy Policy, Elsevier, vol. 153(C).
    18. Hao, Yu & Gai, Zhiqiang & Wu, Haitao, 2020. "How do resource misallocation and government corruption affect green total factor energy efficiency? Evidence from China," Energy Policy, Elsevier, vol. 143(C).
    19. Toke S. Aidt, 2016. "Rent seeking and the economics of corruption," Constitutional Political Economy, Springer, vol. 27(2), pages 142-157, June.
    20. Waqar Wadho, 2013. "Control rights, bureaucratic corruption and the allocation of resources," European Journal of Law and Economics, Springer, vol. 35(1), pages 41-59, February.
    21. 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.
    22. Ang, B.W., 2006. "Monitoring changes in economy-wide energy efficiency: From energy-GDP ratio to composite efficiency index," Energy Policy, Elsevier, vol. 34(5), pages 574-582, March.
    23. Li, Ming-Jia & He, Ya-Ling & Tao, Wen-Quan, 2017. "Modeling a hybrid methodology for evaluating and forecasting regional energy efficiency in China," Applied Energy, Elsevier, vol. 185(P2), pages 1769-1777.
    24. Kander, Astrid & Warde, Paul & Teives Henriques, Sofia & Nielsen, Hana & Kulionis, Viktoras & Hagen, Sven, 2017. "International Trade and Energy Intensity During European Industrialization, 1870–1935," Ecological Economics, Elsevier, vol. 139(C), pages 33-44.
    25. Wang, Yibo, 2023. "Exploring resource endowment and human capital impact on regional energy efficiency in China in the context of COP26," Resources Policy, Elsevier, vol. 81(C).
    26. Ruixue Jia & Huihua Nie, 2017. "Decentralization, Collusion, and Coal Mine Deaths," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 105-118, March.
    27. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    28. Pailler, Sharon, 2018. "Re-election incentives and deforestation cycles in the Brazilian Amazon," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 345-365.
    29. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    30. Wang, Qiang & Qiu, Huan-Ning & Kuang, Yaoqiu, 2009. "Market-driven energy pricing necessary to ensure China's power supply," Energy Policy, Elsevier, vol. 37(7), pages 2498-2504, July.
    31. Joseph Stiglitz, 1998. "Distinguished Lecture on Economics in Government: The Private Uses of Public Interests: Incentives and Institutions," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 3-22, Spring.
    32. Kaller, Alexander & Bielen, Samantha & Marneffe, Wim, 2018. "The impact of regulatory quality and corruption on residential electricity prices in the context of electricity market reforms," Energy Policy, Elsevier, vol. 123(C), pages 514-524.
    33. Liu, Fengqi & Kang, Yuxin & Guo, Kun & Sun, Xiaolei, 2021. "The relationship between air pollution, investor attention and stock prices: Evidence from new energy and polluting sectors," Energy Policy, Elsevier, vol. 156(C).
    34. Zhu, Mengye & Qi, Ye & Belis, David & Lu, Jiaqi & Kerremans, Bart, 2019. "The China wind paradox: The role of state-owned enterprises in wind power investment versus wind curtailment," Energy Policy, Elsevier, vol. 127(C), pages 200-212.
    35. Xinshu Zhao & John G. Lynch & Qimei Chen, 2010. "Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 37(2), pages 197-206, August.
    36. Del Monte, Alfredo & Papagni, Erasmo, 2001. "Public expenditure, corruption, and economic growth: the case of Italy," European Journal of Political Economy, Elsevier, vol. 17(1), pages 1-16, March.
    37. Xiang Chen & Xuping Zhang & Xin Wu & Ching-Cheng Lu, 2022. "The environmental health and energy efficiency in China: A network slacks-based measure," Energy & Environment, , vol. 33(1), pages 170-188, February.
    38. Roy, Jayjit & Yasar, Mahmut, 2015. "Energy efficiency and exporting: Evidence from firm-level data," Energy Economics, Elsevier, vol. 52(PA), pages 127-135.
    39. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.
    40. Li, Ke & Lin, Boqiang, 2014. "The nonlinear impacts of industrial structure on China's energy intensity," Energy, Elsevier, vol. 69(C), pages 258-265.
    41. Lu, Chuanyi & Zhang, Xiliang & He, Jiankun, 2010. "A CGE analysis to study the impacts of energy investment on economic growth and carbon dioxide emission: A case of Shaanxi Province in western China," Energy, Elsevier, vol. 35(11), pages 4319-4327.
    42. Zhao, Xiaoli & Ma, Chunbo & Hong, Dongyue, 2010. "Why did China's energy intensity increase during 1998-2006: Decomposition and policy analysis," Energy Policy, Elsevier, vol. 38(3), pages 1379-1388, March.
    43. Cansino, José M. & Román, Rocío & Ordóñez, Manuel, 2016. "Main drivers of changes in CO2 emissions in the Spanish economy: A structural decomposition analysis," Energy Policy, Elsevier, vol. 89(C), pages 150-159.
    Full references (including those not matched with items on IDEAS)

    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. Wang, Shuhong & Zhao, Danqing & Chen, Hanxue, 2020. "Government corruption, resource misallocation, and ecological efficiency," Energy Economics, Elsevier, vol. 85(C).
    2. Zhao, Yueyang & Mao, Jinzhou, 2022. "Energy effects of non-energy policies: Minimum wage standard and enterprise energy efficiency in China," Resources Policy, Elsevier, vol. 79(C).
    3. Jain, Princy & Goswami, Binoy, 2021. "Energy efficiency in South Asia: Trends and determinants," Energy, Elsevier, vol. 221(C).
    4. 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.
    5. Huang, Junbing & Du, Dan & Hao, Yu, 2017. "The driving forces of the change in China's energy intensity: An empirical research using DEA-Malmquist and spatial panel estimations," Economic Modelling, Elsevier, vol. 65(C), pages 41-50.
    6. 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.
    7. Zaim, Osman & Uygurtürk Gazel, Tuğçe & Akkemik, K. Ali, 2017. "Measuring energy intensity in Japan: A new method," European Journal of Operational Research, Elsevier, vol. 258(2), pages 778-789.
    8. Zheng, Mingbo & Feng, Gen-Fu & Feng, Suling & Yuan, Xuemei, 2019. "The road to innovation vs. the role of globalization: A dynamic quantile investigation," Economic Modelling, Elsevier, vol. 83(C), pages 65-83.
    9. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    10. 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.
    11. Pothen, Frank & Schymura, Michael, 2014. "Bigger cakes with less ingredients? A comparison of material use of the world economy," ZEW Discussion Papers 14-030, ZEW - Leibniz Centre for European Economic Research.
    12. Wu, F. & Fan, L.W. & Zhou, P. & Zhou, D.Q., 2012. "Industrial energy efficiency with CO2 emissions in China: A nonparametric analysis," Energy Policy, Elsevier, vol. 49(C), pages 164-172.
    13. 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).
    14. Wenwu Cai & Xiaofeng Quan & Gary Gang Tian, 2023. "Local Corruption and Trade Credit: Evidence from an Emerging Market," Journal of Business Ethics, Springer, vol. 185(3), pages 563-594, July.
    15. Jimenez, Raul & Mercado, Jorge, 2014. "Energy intensity: A decomposition and counterfactual exercise for Latin American countries," Energy Economics, Elsevier, vol. 42(C), pages 161-171.
    16. Bhadbhade, Navdeep & Yilmaz, Selin & Zuberi, Jibran S. & Eichhammer, Wolfgang & Patel, Martin K., 2020. "The evolution of energy efficiency in Switzerland in the period 2000–2016," Energy, Elsevier, vol. 191(C).
    17. Chen, Zhongfei & Barros, Carlos Pestana & Borges, Maria Rosa, 2015. "A Bayesian stochastic frontier analysis of Chinese fossil-fuel electricity generation companies," Energy Economics, Elsevier, vol. 48(C), pages 136-144.
    18. Dargahi, Hassan & Khameneh, Kazem Biabany, 2019. "Energy intensity determinants in an energy-exporting developing economy: Case of Iran," Energy, Elsevier, vol. 168(C), pages 1031-1044.
    19. Wang, H. & Ang, B.W. & Su, Bin, 2017. "Assessing drivers of economy-wide energy use and emissions: IDA versus SDA," Energy Policy, Elsevier, vol. 107(C), pages 585-599.
    20. Tao, Zhang & Huang, Xiao Yue & Dang, Yi Jing & Qiao, Sen, 2022. "The impact of factor market distortions on profit sustainable growth of Chinese renewable energy enterprises: The moderating effect of environmental regulation," Renewable Energy, Elsevier, vol. 200(C), pages 1068-1080.

    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:enepol:v:183:y:2023:i:c:s030142152300410x. 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/enpol .

    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.