How Biased Technological Progress Sustainably Improve the Energy Efficiency: An Empirical Research of Manufacturing Industry in China

Abstract Based on the perspective of biased technological progress and factor substitution, this paper constructs the trans-log cost function including input factors, neutral and biased technological progress. We study the factor biases of technical progress and the impact on energy intensity in the whole manufacturing industry and three intensive industries from 2004 to 2016. The results show that the relationship between energy and capital, energy and labor is substitution relationship, reflecting that the increase of capital or labor input can reduce the energy intensity in manufacturing industry. In addition, the bias on the energy and non-energy factors from technological progresses presents the heterogeneity. R&D investment shows energy bias and energy-saving effect, which should be enhanced in manufacturing industries. Finally, the impact of technological progress on energy intensity is different, among which the effect of biased technological progress is more significant through factor substitution. The beneficial enlightenments for selecting suitable technological progress to improve factor structure and energy intensity in manufacturing industry are given in the research.