Energy intensity, supply chain digitization, technological progress bias in China's industrial sectors

Cem Işık, Jiale Yan and Serdar Ongan

Energy Economics, 2025, vol. 145, issue C

Abstract: Supply chain digitization through the development of digital technologies provides an opportunity to promote innovation and technological advancement in enterprises. This study first adopts the supply-side economics (Lucas, 1990) approach to measure the bias of Technological Progress (TP) in China's industrial sectors and analyzes the specific mechanisms. Based on the three-factor nested CES production function of energy, capital, and labor, this study further examines the energy intensity effect of TP bias due to supply chain digitization for 36 Chinese industrial sectors from 2008 to 2021. The findings are as follows. First, supply chain digitization-induced TP bias significantly mitigates the energy intensity of industrial sectors through the relative share of energy factors. Second, there are differences in the impact on energy intensity across sectors with different levels of competition and supply chain concentration. Third, supply chain digitization induced TP bias toward capital, which is the main reason for the decrease in the relative share of energy factors. Therefore, policymakers should consider sectoral characteristics and the effects of digitalization when designing their energy policies and technology investments. They should also stimulate economic growth by optimizing capital and energy use by developing digital technologies.

Keywords: Supply chain digitization; Digital transformation; Technological progress bias; Energy intensity; CES (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:145:y:2025:i:c:s014098832500266x

DOI: 10.1016/j.eneco.2025.108442

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