Investigating the role of enterprises' property rights in China's provincial industrial energy intensity

Continuous decentralisation of the property rights of state-owned enterprises (SOEs) constitutes one of the most important market-oriented reforms in China. However, previous studies have seldom investigated the relationship between changes to enterprises' property rights and energy intensity. As industrial departments consume most of China's total energy, this study examines the influence of changes to enterprises' property ownership on industrial energy intensity across China's provincial regions. Based on a series of econometric analysis and China's 30 provincial regions between 2005 and 2019, the empirical results indicate that decentralising industrial SOEs' property rights is beneficial for controlling industrial energy intensity. This study also found that regions' degree of openness accelerated this effect. In particular, although the expansion of SOEs increases energy intensity, openness helps SOEs enhance energy sustainability. However, there is significant heterogeneity between different regions and periods. Furthermore, we investigate the roles of research and development (R&D) efficiency and structural change that explain how the decentralisation of SOEs' property rights influences regional industrial energy intensity. The results could help policymakers control the industrial energy intensity in the background of market-oriented reforms.