A Study On Influence Of Industry Energy Outside Substitution On Total Factor Energy Efficiency

Energy is basic resource in economic development. But energy security andenvironmental pollution problem has become the important factor of restricting China’seconomic and social development. In order to improve the energy efficiency, energyconservation and emissions reduction policy has become the important means to solvethe problem of energy. In recent years, through optimizing capital, labor, energy andother factors in the production, increasing capital and labor input, is becoming animportant means of improving energy efficiency.The paper uses the translog cost function and DEA-malquist productivity index tocalculate the energy external elasticity of substitution and total factor energy efficiencyof36industrial sectors from1997to2010. We find that labor and energy substitutionrelationship is stable. The labor-intensive industries is greater than the capital andenergy-intensive industries. Capital and energy substitution relationship is not stable.The elasticity of substitution is on the decline. Some industries are complementaryrelationship. The elasticity of substitution of energy and capital intensive industries isgreater than the labor-intensive industry. Industry total factor of energy efficiency isimproving. The efficiency of capital and energy-intensive industries is higher thanlabor-intensive industries. Technological progress plays the biggest role in promotingenergy industrial total factor productivity, the second is the pure technical efficiencyand the contribution of scale efficiency is the minimum. On this basis, we analyze theinfluence of energy substitution on total factor energy efficiency using the panel VARmodel. We find that the capital-energy substitution has a positive impact on totalfactor energy efficiency. The labor-energy substitution has negative effects on totalfactor energy efficiency. By strengthening R&D, opening elements markets,developing labor-intensive industries, and promoting external alternative energy, wecan improve total factor energy efficiency of industry.