Foreign versus indigenous innovation and energy intensity: further research across Chinese regions

The aim of this work is to analyze the role played by both foreign and indigenous innovation on energy intensity as well as the possible interactions between them across 30 Chinese regions. In addition, we consider different types of corporate ownership that operate in China. We control our estimates by energy price and the composition effect. We provide a complete picture of energy sector by examining all sources of energy. We use Beck and Katz estimator in order to take into account heterocedasticity and serial correlation over the period 2006–2010. Our results suggest that both foreign and domestic innovation efforts played a significant role in improving energy efficiency in China. However, the interaction between foreign and indigenous innovations is modest. We observe significant differences among investment ownership due to its geographical location. These findings have important policy implications for energy sector in China.