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Industrial energy substitution and a revised Allen elasticity in China

  • Research Article
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Frontiers of Economics in China

Abstract

To overcome the drawbacks in estimating the rate of input substitution in existing econometric models, our paper is first to estimate the absolute/net rate of input substitution of capital and labor for energy in China’s industrial sector. Based on trans-log cost function with constant elasticity of substitution and combined MES method with technology progress and output effect, our paper finds a significant substitution relationship between labor and energy and an uncertain substitution relationship between capital and energy with some complementary characteristics. Furthermore, technology progress and output effect are found to have enhanced the substitution of labor for energy in the past 30 years. Based on these empirical findings, constructive suggestions are made concerning the medium and long-term development strategy of energy in China’s industrial sector.

摘要

针对以往用于估计要素替代率的经济模型存在的不足, 以超对数成本函数和不变替代弹性为基础, 把MES 模型与技术进步和产出效应结合起来, 首次估算了中国工业部门能源与资本及劳动之间的绝对替代弹性和净替代弹性(相对替代率), 发现劳动与能源之间存在明显的替代关系, 而资本与能源之间的替代关系呈现不确定性, 即资本与能源之间呈现间或的互补关系。此外, 实证研究还发现技术进步和产出效应在过去的近30 年中促进了劳动对能源的替代。最后根据实证研究, 对中国工业部门的能源中长期发展战略提出了建设性的建议。

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Authors and Affiliations

  1. Department of National Economic Management, School of Economics, Renmin University of China, Beijing, 100872, China

    Chengjun Lu & Duanming Zhou

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  1. Chengjun Lu
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  2. Duanming Zhou
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Correspondence to Chengjun Lu.

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Translated from Shuliang jingji jishu jingji yanjiu 数量经济技术经济研究 (The Journal of Quantitative & Technical Economics), 2008, (5): 30–42

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Lu, C., Zhou, D. Industrial energy substitution and a revised Allen elasticity in China. Front. Econ. China 4, 110–124 (2009). https://doi.org/10.1007/s11459-009-0007-2

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