Policy incentives, R&D investment, and the energy intensity of China's manufacturing sector

The Chinese strategic plan "Made in China (2025)" aims at improving the independent innovation capacity of the manufacturing industry. It also commits to constructing green manufacturing systems through cleaner production and green technologies. The Chinese government provides research and development (R&D) preferential policies to promote the realization of these aims. Using the two-stage least square (2SLS) method, this paper tests the impact of R&D capital and its spillover on the energy intensity of the Chinese manufacturing industry. It also evaluates the effectiveness of R&D policy in promoting R&D investment at the industry level. The findings show that R&D capital is positively linked to the reduction of energy intensity, and heterogeneity exists in the relationship between energy intensity and R&D capital across industries. This study finds that in general, R&D subsidies and tax relief do not significantly promote R&D investment, but R&D subsidies generate a significantly positive effect on the R&D intensity in the high-tech industries. (C) 2020 Elsevier Ltd. All rights reserved.