Domestic value chain embedding and renewable energy efficiency: sectoral evidence from China

With the escalation of geopolitical tensions, many countries have shifted their focus from global value chains (GVCs) to domestic value chains (DVCs). Simultaneously, the accelerating pace of global low-carbon economic development has imposed higher requirements on renewable energy utilization. Given the dual context of China’s economic transformation and green development, this study employs three-dimensional data encompassing 30 provinces and 13 sub-manufacturing sectors from 2002 to 2017 to empirically examine the causal relationship between DVC embedding and renewable energy efficiency. The findings reveal that DVC embedding leads to a reduction in renewable energy efficiency. The mechanism analysis demonstrates that DVC embedding decreases renewable energy intensity and green total factor productivity, thereby inhibiting the improvement of renewable energy efficiency. The heterogeneity analysis indicates that the negative impact of DVC embedding on renewable energy efficiency is more pronounced in low-pollution industries, high-tech industries, and central-western provinces. This study provides a decision-making reference for developing countries to coordinate domestic value chain optimization with energy structure adjustment, offering practical significance for achieving energy-saving and emission-reduction targets.