Regional productivity in the energy structure transition of the Yellow River Basin in China - estimation based on a restricted cost function

Jingyi Wang, Hongjun Guan and Aiwu Zhao

Applied Energy, 2024, vol. 375, issue C, No S0306261924015617

Abstract: The energy structure transformation (EST) is crucial for achieving the “dual carbon” goals and enhancing regional productivity. Based on panel data from provinces along the Yellow River Basin (YRB) from 2005 to 2021, this study incorporates the energy structure into a restricted cost function to explore the allocative efficiency, spatial dynamic evolution trends, and input factor biases of productivity in the YRB in the context of EST. The analysis shows the following. (i) The average annual productivity growth in the YRB reaches 8.25%, which shows a “U” shaped trend from 11.66% to 8.43%. The scale effect is the main driving force of productivity growth and the contribution of the effect of energy consumption has been amplified in recent years. (ii) Sub-basin analysis shows that productivity growth has the pattern of downstream > midstream > upstream. Although the effect of technological change in the upstream of the YRB is greater than that in the midstream and downstream, its low energy efficiency drags down its development. (iii) Markov chain analysis shows that the development trend of productivity growth in the provinces along the YRB is relatively stable, and it is not easy for provinces to jump ranks. (iv) The analysis of factor input bias shows that technological progress tends to favour the use of capital and energy, while saving the labour. For EST, there is a factor-saving bias for all factors. On this basis, countermeasures to optimize sustainable economic development and EST in the YRB are proposed from a systemic perspective.

Keywords: Yellow River Basin; Energy structure transformation; Productivity; Restricted cost function (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1016/j.apenergy.2024.124178

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