Development And Influencing Factors Of The Photovoltaic Industry In China

Driven by the movement of energy conservation and emission reduction, the goal of sustainable development and the realization of global obligations, China has to vigorously develop the photovoltaic industry. By using a firm-level dataset and a comprehensive array of up-to-date micro-economical methods, this paper at first estimates the production function and total factor productivity(TFP) of the photovoltaic industry(PV) in China. Then this paper compares the annual growth rate of PV's TFP with those of the others' in order to better judge its development. What's more, this paper checks the influences, both individually and collectively, of factors that may possibly affect the development of PV in China. As a result, the state-share and scale of an enterprise will affect its TFP significantly, while the other factors fail to make a difference. However, it is interesting to find that while R&D alone cannot exert a significant impact on TFP, its interaction with state-share proves to improve TFP notably. Considering that Factor State-share's individual effect on PV is negative and its interaction with R&D on PV is positive, we are safe to conclude that the low efficiency of State-Owned Companies comes mainly from the poor management and operational skills, not from technological investment. At the end of this paper, based on the results of previous empirical study, some advisable suggestions intended to facilitate the development of PV in China are offered.