Factor reallocation path for low-carbon transformation: A perspective of manufacturing industry ecosystem

Wenxin Mao, Huifang Sun, Wenping Wang and Dang Luo

Energy Economics, 2024, vol. 134, issue C

Abstract: The incomplete production factor market induces more factors flowing to industries with lower carbon productivity, highlighting the need for effective factor reallocation to promote low-carbon transformation. Current research is constrained by the dimension of factor endowments, with insufficient attention given to the problem of diminishing marginal benefit of factor input in factor reallocation. By combining the factor flow effect induced by productivity difference with the factor allocation equilibrium effect under diminishing marginal benefit, the factor reallocation path for low-carbon transformation is analyzed using random forest algorithm within a high-dimensional data environment from the perspective of manufacturing industry ecosystem. The results indicate that effective factor reallocation for low-carbon transformation depends on breaking the dual segmentation of factors between regions and industries to facilitate flow of factors from shrub layer industries to canopy layer industries. Adjusting key factor combinations to fall within the optimal equilibrium interval of S-shaped or anti S-shaped partial dependence curves maximizes the marginal benefits of low-carbon transformation. Industries must upgrade their factor endowment structure to accumulate essential carrying capacities that support advanced manufacturing, leveraging the low-carbon transformation dividends of advanced factors inflow and technology spillover. Otherwise, aligning with regional factor comparative advantage to cultivate differentiated characteristic manufacturing industries offers a promising alternative, capitalizing on the low-carbon efficiency premium derived from specialized division of labor.

Keywords: Factor reallocation; Low-carbon transformation; Total factor carbon productivity; Factor flow; Manufacturing industry (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:134:y:2024:i:c:s0140988324003281

DOI: 10.1016/j.eneco.2024.107620

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