An analysis of technological factors and energy intensity in China

The main purpose of this research is to explore the effects of technological factors on energy intensity, including indigenous research and development (R&D) activity, technology spillovers through openness in the form of foreign direct investment, export, and import in one united framework. By scrutinising panel data of China's 30 provinces from 2000 to 2013, this article first uses fixed effects and feasible generalised least squares to investigate the effects of these technological factors on energy intensity by taking both economic structure and energy price as control variables. The results show that indigenous R&D plays a crucial and dominant role in the declining energy intensity among the four technological factors. In addition, technology spillovers coming from the openness of foreign direct investment and import decrease energy intensity except for the export. However, further estimation with the panel threshold model confirms that the effects of technology spillovers on energy intensity depend on the levels of local inputs of R&D expenditure intensity and the full-time equivalent of R&D personnel, allowing us to formulate different policies and measures aimed at encouraging more efficient use of energy that takes into full consideration the characteristics and situations of the technology spillovers.