Total Factor Productivity and Energy Intensity: An Empirical Study of China’s Cement Industry

ABSTRACT

China is the largest cement producer and consumer in the world. The cement industry’s rapid growth has led to a large demand of energy. This study reviews China’s cement industry in terms of energy intensity and examines the effects of technological progress on energy intensity. It also discusses the feasibility of achieving China’s energy reduction targets. We employ the Granger causality test and find that the total factor productivity or technological progress causes the energy intensity of the cement industry. Impulse responses analysis also proves that in the long run the technological change contributes to the decline in energy intensity of cement production.

KEY WORDS:

• cement industry
• China
• energy consumption
• energy intensity
• total factor productivity

Funding

This study was sponsored by the Fundamental Research Funds for the Central Universities in China (No. 105274054), Scientific Research Foundation for the Returned Overseas Chinese Scholars, National Natural Science Foundation of China (No. 71503094), and Social Science Research Fund (No. 14YJCZH055) from the Chinese Ministry of Education.

Additional information

Funding

This study was sponsored by the Fundamental Research Funds for the Central Universities in China (No. 105274054), Scientific Research Foundation for the Returned Overseas Chinese Scholars, National Natural Science Foundation of China (No. 71503094), and Social Science Research Fund (No. 14YJCZH055) from the Chinese Ministry of Education.