IDEAS home Printed from https://ideas.repec.org/a/sae/engenv/v37y2026i2p560-580.html

The impact of industry integration on industrial energy efficiency in China

Author

Listed:
  • Haohao Wei
  • Sheng Ding

Abstract

This study examined the impact of industrial integration on industrial energy efficiency in China. We measured industrial energy efficiency using stochastic frontier analysis with Mundlak auxiliary equations and distinguished between effective and ineffective energy use. We empirically examined the causal relationship between industrial integration and industrial energy efficiency using Chinese provincial industrial sector data for 2004 to 2021. The estimates showed that increasing the industry integration level by 1% reduced industrial inefficient energy use by 1.640%, which demonstrates that industry integration improved industrial energy efficiency significantly. The mechanism test showed that industrial integration improved industrial energy consumption through the scale effect. However, industrial integration can improve production efficiency through the technique effect, promote industrial upgrading through the composition effect, and reduce industrial energy intensity. Additionally, the causal relationship between industrial integration and industrial energy efficiency showed regional heterogeneity. The scale effect caused by industrial integration, rebound effect of technological progress, and transregional industrial transfer weakened the energy-saving effect of industrial integration.

Suggested Citation

  • Haohao Wei & Sheng Ding, 2026. "The impact of industry integration on industrial energy efficiency in China," Energy & Environment, , vol. 37(2), pages 560-580, March.
    • Handle: RePEc:sae:engenv:v:37:y:2026:i:2:p:560-580
    DOI: 10.1177/0958305X241246191
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0958305X241246191
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0958305X241246191?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
    ---><---

    References listed on IDEAS

    as
    1. Shahbaz, Muhammad & Song, Malin & Ahmad, Shabbir & Vo, Xuan Vinh, 2022. "Does economic growth stimulate energy consumption? The role of human capital and R&D expenditures in China," Energy Economics, Elsevier, vol. 105(C).
    2. Baltagi, Badi H., 2006. "An Alternative Derivation Of Mundlak'S Fixed Effects Results Using System Estimation," Econometric Theory, Cambridge University Press, vol. 22(6), pages 1191-1194, December.
    3. Fan, Ying & Liao, Hua & Wei, Yi-Ming, 2007. "Can market oriented economic reforms contribute to energy efficiency improvement? Evidence from China," Energy Policy, Elsevier, vol. 35(4), pages 2287-2295, April.
    4. Zhao, Jun & Dong, Xiucheng & Dong, Kangyin, 2021. "How does producer services’ agglomeration promote carbon reduction?: The case of China," Economic Modelling, Elsevier, vol. 104(C).
    5. Gambardella, Alfonso & Torrisi, Salvatore, 1998. "Does technological convergence imply convergence in markets? Evidence from the electronics industry," Research Policy, Elsevier, vol. 27(5), pages 445-463, September.
    6. Haochang Yang & Faming Zhang & Yixin He, 2021. "Exploring the effect of producer services and manufacturing industrial co-agglomeration on the ecological environment pollution control in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 16119-16144, November.
    7. Mohd Alsaleh & A.S. Abdul-Rahim & H.O. Mohd-Shahwahid & Lee Chin & Fakarudin Kamarudin, 2016. "An Empirical Analysis for Technical Efficiency of Bioenergy Industry in EU28 Region Based on Data Envelopment Analysis Method," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 290-304.
    8. Li, Jinying & Li, Sisi, 2020. "Energy investment, economic growth and carbon emissions in China—Empirical analysis based on spatial Durbin model," Energy Policy, Elsevier, vol. 140(C).
    9. Zhou, Shengjia & Wang, Junhao & Xu, Bing, 2022. "Innovative coupling and coordination: Automobile and digital industries," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    10. Eswaran, Mukesh & Kotwal, Ashok, 2002. "The role of the service sector in the process of industrialization," Journal of Development Economics, Elsevier, vol. 68(2), pages 401-420, August.
    11. Xu, Mengmeng & Tan, Ruipeng & He, Xinju, 2022. "How does economic agglomeration affect energy efficiency in China?: Evidence from endogenous stochastic frontier approach," Energy Economics, Elsevier, vol. 108(C).
    12. Alan Macpherson, 2008. "Producer Service Linkages and Industrial Innovation: Results of a Twelve‐Year Tracking Study of New York State Manufacturers," Growth and Change, Wiley Blackwell, vol. 39(1), pages 1-23, March.
    13. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
    14. Peng, Lihong & Zhang, Yiting & Wang, Yejun & Zeng, Xiaoling & Peng, Najun & Yu, Ang, 2015. "Energy efficiency and influencing factor analysis in the overall Chinese textile industry," Energy, Elsevier, vol. 93(P1), pages 1222-1229.
    15. Guo, Ran & Yuan, Yijun, 2020. "Different types of environmental regulations and heterogeneous influence on energy efficiency in the industrial sector: Evidence from Chinese provincial data," Energy Policy, Elsevier, vol. 145(C).
    16. Hung-jen Wang & Peter Schmidt, 2002. "One-Step and Two-Step Estimation of the Effects of Exogenous Variables on Technical Efficiency Levels," Journal of Productivity Analysis, Springer, vol. 18(2), pages 129-144, September.
    17. Liu, Xiping & Zhang, Xiaoling & Sun, Wen, 2022. "Does the agglomeration of urban producer services promote carbon efficiency of manufacturing industry?," Land Use Policy, Elsevier, vol. 120(C).
    18. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 755-787.
    19. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    20. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    21. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
    22. Li, Ke & Lin, Boqiang, 2018. "How to promote energy efficiency through technological progress in China?," Energy, Elsevier, vol. 143(C), pages 812-821.
    23. Filipović, Sanja & Verbič, Miroslav & Radovanović, Mirjana, 2015. "Determinants of energy intensity in the European Union: A panel data analysis," Energy, Elsevier, vol. 92(P3), pages 547-555.
    24. Fai, Felicia & von Tunzelmann, Nicholas, 2001. "Industry-specific competencies and converging technological systems: evidence from patents," Structural Change and Economic Dynamics, Elsevier, vol. 12(2), pages 141-170, July.
    25. Mehdi Farsi & Massimo Filippini & Michael Kuenzle, 2005. "Unobserved heterogeneity in stochastic cost frontier models: an application to Swiss nursing homes," Applied Economics, Taylor & Francis Journals, vol. 37(18), pages 2127-2141.
    26. Wang, Xipan & Song, Junnian & Duan, Haiyan & Wang, Xian'en, 2021. "Coupling between energy efficiency and industrial structure: An urban agglomeration case," Energy, Elsevier, vol. 234(C).
    27. Liao, Nuo & He, Yong, 2018. "Exploring the effects of influencing factors on energy efficiency in industrial sector using cluster analysis and panel regression model," Energy, Elsevier, vol. 158(C), pages 782-795.
    28. 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.
    29. Sheng, Pengfei & Li, Jun & Zhai, Mengxin & Huang, Shoujun, 2020. "Coupling of economic growth and reduction in carbon emissions at the efficiency level: Evidence from China," Energy, Elsevier, vol. 213(C).
    30. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    31. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    32. Joseph Francois & Julia Woerz, 2008. "Producer Services, Manufacturing Linkages, and Trade," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 199-229, December.
    33. You, Jianmin & Zhang, Wei, 2022. "How heterogeneous technological progress promotes industrial structure upgrading and industrial carbon efficiency? Evidence from China's industries," Energy, Elsevier, vol. 247(C).
    34. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
    35. Alsaleh, Mohd & Abdul-Rahim, A.S., 2018. "Determinants of cost efficiency of bioenergy industry: Evidence from EU28 countries," Renewable Energy, Elsevier, vol. 127(C), pages 746-762.
    36. Sheng, Pengfei & Guo, Xiaohui, 2018. "Energy consumption associated with urbanization in China: Efficient- and inefficient-use," Energy, Elsevier, vol. 165(PB), pages 118-125.
    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. Sheng, Pengfei & Liu, Weiliang, 2024. "Does the government's green commitment matter for energy conservation in China? The role of public spending," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1061-1073.
    2. Farsi, Mehdi & Filippini, Massimo, 2009. "An analysis of cost efficiency in Swiss multi-utilities," Energy Economics, Elsevier, vol. 31(2), pages 306-315, March.
    3. Maiorano, Federica, 2009. "Estimating Time-Varying Technical Inefficiency for a Panel of Telecommunications Operators: A Distance Function Approach," The Journal of Economic Asymmetries, Elsevier, vol. 6(2), pages 109-135.
    4. Lv, Yulan & Chen, Wei & Cheng, Jianquan, 2020. "Effects of urbanization on energy efficiency in China: New evidence from short run and long run efficiency models," Energy Policy, Elsevier, vol. 147(C).
    5. Pengfei Sheng & Tingting Yang & Tengfei Zhang, 2021. "The Unmet Medical Demand among China’s Urban Residents," IJERPH, MDPI, vol. 18(21), pages 1-13, November.
    6. Filippini, Massimo & Hunt, Lester C., 2012. "US residential energy demand and energy efficiency: A stochastic demand frontier approach," Energy Economics, Elsevier, vol. 34(5), pages 1484-1491.
    7. Lundgren, Tommy & Marklund, Per-Olov & Zhang, Shanshan, 2016. "Industrial energy demand and energy efficiency – Evidence from Sweden," Resource and Energy Economics, Elsevier, vol. 43(C), pages 130-152.
    8. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2007. "Benchmarking and Regulation in the Electricity Distribution Sector," CEPE Working paper series 07-54, CEPE Center for Energy Policy and Economics, ETH Zurich.
    9. Castiglione, Concetta & Infante, Davide & Zieba, Marta, 2023. "Public support for performing arts. Efficiency and productivity gains in eleven European countries," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    10. Federico Belotti & Silvio Daidone & Giuseppe Ilardi & Vincenzo Atella, 2013. "Stochastic frontier analysis using Stata," Stata Journal, StataCorp LLC, vol. 13(4), pages 718-758, December.
    11. Federico Belotti & Giuseppe Ilardi & Andrea Piano Mortari, 2019. "Estimation of Stochastic Frontier Panel Data Models with Spatial Inefficiency," CEIS Research Paper 459, Tor Vergata University, CEIS, revised 30 May 2019.
    12. Sickles, Robin C. & Song, Wonho & Zelenyuk, Valentin, 2018. "Econometric Analysis of Productivity: Theory and Implementation in R," Working Papers 18-008, Rice University, Department of Economics.
    13. Ganesh Kawadia & Ankit Kumar Suryawanshi, 2023. "Tax Effort of the Indian States from 2001–2002 to 2016–2017: A Stochastic Frontier Approach," Millennial Asia, , vol. 14(1), pages 85-101, March.
    14. Wang, Jianda & Dong, Kangyin & Taghizadeh-Hesary, Farhad & Dong, Xiucheng, 2023. "Does industrial convergence mitigate CO2 emissions in China? A quasi-natural experiment on “Triple Play” Reform," Energy Economics, Elsevier, vol. 128(C).
    15. Gralka, Sabine, 2018. "Stochastic frontier analysis in higher education: A systematic review," CEPIE Working Papers 05/18, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    16. Paul, Satya & Shankar, Sriram, 2018. "Modelling Efficiency Effects in a True Fixed Effects Stochastic Frontier," MPRA Paper 87437, University Library of Munich, Germany.
    17. Satya Paul & Sriram Shankar, 2020. "Estimating efficiency effects in a panel data stochastic frontier model," Journal of Productivity Analysis, Springer, vol. 53(2), pages 163-180, April.
    18. Belotti, Federico & Ilardi, Giuseppe, 2018. "Consistent inference in fixed-effects stochastic frontier models," Journal of Econometrics, Elsevier, vol. 202(2), pages 161-177.
    19. Catherine Cazals & Paul Dudley & Jean-Pierre Florens & Michael Jones, 2012. "A Panel Data Analysis of Inefficiency and Heterogeneity in the Postal Sector," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Multi-Modal Competition and the Future of Mail, chapter 8, Edward Elgar Publishing.
    20. Sebastian Linde, 2023. "Hospital cost efficiency: an examination of US acute care inpatient hospitals," International Journal of Health Economics and Management, Springer, vol. 23(3), pages 325-344, September.

    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:sae:engenv:v:37:y:2026:i:2:p:560-580. 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: SAGE Publications (email available below). General contact details of provider: .

    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.