The Impact of Ownership Structure on Technological Innovation and Energy Intensity: Evidence from China

Abstract

Environmental pollution and climate warming have become global issues affecting human life, and the burning of fossil fuels is a major source of greenhouse gases. Ownership structure is related to energy efficiency and a change in ownership structure has a significant potential for energy saving. However, few papers have studied the impact of ownership structure on energy intensity from the perspective of technological innovation in the past. Based on panel data from 29 Chinese provinces from 2005 to 2020, we systematically investigate the impact of industrial department ownership structure on energy intensity and study the function of technological innovation in this relationship from the perspective of ownership heterogeneity by using empirical models including ordinary least squares, two-way fixed effects and random effects. The empirical results of this study reveal three findings. First, as the proportion of state-owned industrial enterprises increases by one unit, energy intensity increases by 0.803 units. However, as the proportion of Hong Kong, Macao and Taiwan-invested industrial enterprises, private industrial enterprises and foreign-invested industrial enterprises increases by one unit, energy intensity decreases by 0.847 units and 0.549 units. Second, R&D activities, FDI, capital intensity and exports can significantly reduce energy intensity, but imports can increase energy intensity. Third, the ownership structure can affect energy intensity by influencing R&D expenditure. The increase in the proportion of state-owned industrial enterprises can reduce R&D expenditure, but results in the opposite situation in private firms. Foreign-invested enterprises can reduce energy intensity by making more use of the parent company’s technology. Based on the above empirical results, we propose suggestions to reduce energy intensity, which can provide reference for government to formulate more effective energy policies and realize sustainable development.