How Do Resource Misallocation and Government Corruption Affect Green Total Factor Energy Efficiency? Evidence From China

At present, China is undergoing industrial restructuring. However, the resource misallocation problem in China is still serious, which may affect China’s green total factor energy efficiency (GTFEE). Based on previous studies, misallocation may be exacerbated by corruption, which would further inhibit GTFEE. In this study, we utilize the provincial panel data of 30 provinces in China from 2005 to 2016 to investigate the relationship between misallocation, corruption and GTFEE by employing appropriate spatial econometric methods and panel threshold model. The results indicate that there is spatial dependence in GTFEE. Local GTFEE is negative impacted by labor misallocation, while it is not affected by labor misallocation in the neighboring area. There is also evidence that capital misallocation in the local area is negatively correlated with GTFEE, although not statistically significant; while the capital misallocation in the neighboring area has significant negative correlation with local GTFEE. The results also indicate that GTFEE is not significant affected by corruption. It is also found that local corruption would aggravate the inhibiting effect of labor resource misallocation on GTFEE, while the inhibiting effect of capital resource misallocation on GTFEE would not be affected by local government corruption