China’s Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution

Type of content
Discussion / Working Papers
Publisher's DOI/URI
Thesis discipline
Degree name
Publisher
Department of Economics
University of Canterbury. Economics.
Journal Title
Journal ISSN
Volume Title
Language
Date
2008
Authors
Ma, H.
Oxley, L.
Gibson, J.
Kim, B.
Abstract

With its rapid economic growth, China’s primary energy consumption has exceeded domestic energy production since 1994, leading to a substantial expansion in energy imports, particularly of oil. China’s energy demand has an increasingly significant impact on global energy markets. In this paper Allen partial elasticities of factor and energy substitution, and price elasticities of energy demand, are calculated for China using a two-stage translog cost function approach. The results suggest that energy is substitutable with both capital and labour. Coal is significantly substitutable with electricity and complementary with diesel while gasoline and electricity are substitutable with diesel. China’s energy intensity is increasing during the study period (1995-2004) and the major driver appears to be due to the increased use of energy intensive technology.

Description
RePEc Working Papers Series: No. 01/2008
Citation
Ma, H., Oxley, L., Gibson, J., Kim, B. (2008) China’s Energy Economy: Technical Change, Factor Demand and Interfactor/Interfuel Substitution. University of Canterbury. 31pp..
Keywords
China, Interfactor/interfuel substitution, technology, energy intensity decomposition
Ngā upoko tukutuku/Māori subject headings
ANZSRC fields of research
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