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Resources allocation and more efficient use of energy in China's textile industry

Hongli Zhao and Boqiang Lin ()

Energy, 2019, vol. 185, issue C, 111-120

Abstract: China's textile industry has developed rapidly in recent years. China's cotton textile spindles account for half the world's total, while China's textile trade volume accounts for one-third of the world's total. China has become a veritable textile superpower. The present paper establishes a new application of the logarithmic production function model and performs the preliminary analysis of output elasticity and the elasticity of substitution. Results show that the output elasticities of capital, labor, and energy of the textile industry are positive for the period 1980–2012. In the textile industry, the output elasticity of energy is greatest, followed by that of labor and that of capital. A stable and significant substitution relationship exists among capital, labor, and energy, and the elasticity of substitution remains at a value of around 1. The elasticity of substitution between labor and energy is largest and remains above 1.01 during the sample period, which indicates that the technical level of the textile industry remains relatively backward and results in the high substitution of labor for energy. On the basis of empirical analysis, the paper discusses policy implications and proposes countermeasures for the future development of the textile industry.

Keywords: Elasticity of substitution; Trans-log production function; Ridge regression (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:185:y:2019:i:c:p:111-120

DOI: 10.1016/j.energy.2019.06.173

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