Is technological change biased toward energy? A multi-sectoral analysis for the French economy

doi:10.1016/j.enpol.2009.11.061

Energy Policy

Volume 38, Issue 4, April 2010, Pages 1842-1850

https://doi.org/10.1016/j.enpol.2009.11.061 Get rights and content

Abstract

Since the adoption and implementation of new technologies has an important influence on the structure and performance of the economy in both developed and developing countries, many research papers are devoted to the technology–economy nexus. Motivated by the fact that the impact of technical progress on the demand for different production factors may vary depending on the bias of the technological change, in this paper, by estimating a translog cost-share system and using state-space modeling technique, we investigate to what extent the direction of technical change is biased toward energy and away from other factors. By applying this methodology to the French economy for the period 1978–2006 the obtained results suggest that: first, technical change has a non-neutral impact on factor demands; second, capital-saving technical progress is present in the majority of the sectors studied; third, energy demand has increased in all sectors but electricity and gas. These findings may have important policy implications for environmental and energy issues in France.

Section snippets

Introduction and overview

Most energy-related problems share the following two characteristics: they are associated with the resource scarcity, and they are connected with the trends in economic development. While the former comes from the fact that the production of the energy used in both developed and developing countries is still mainly based on extraction and utilization of non-renewable natural resources (energy supply side), the later implies that, as far as energy is essential for production, the relationship

Data description

The models presented above are estimated on yearly French sectors data, coming from Input–Output tables published by French National Institute of Statistics and of Economic Studies (INSEE). Data for interest rate which is utilized to construct user cost of capital are obtained from Organisation for Economic Cooperation and Development (OECD). We decompose the French economy into 13 sectors according to two main criteria: (1) production technology employed in the sector; (2) degree of cleanness

Main results and discussion

In this section we present the estimation results for our state-space model. For this purpose we choose to provide different graphical analyses of the Kalman filter output. As a preliminary analysis, we report in Fig. 1 the results for three production factors, namely capital, labor and energy.⁶

Conclusions and future work

The main contribution of the present work to the question of direction of technical change might be the identification of the effect of technical progress in relation with different regulatory variables and exogenous structural variables on the demand for three main production factors, capital, labor and energy. First of all, the methodological framework presented in the present paper indicates that non-neutral technical change is present in the French economy. Taken as a whole, from the

Acknowledgment

Yasser Yeddir-Tamsamani thanks Agence de l'Environnement et de la Maîtrise de l'Energie (ADEME) for financial support.

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Is technological change biased toward energy? A multi-sectoral analysis for the French economy

Abstract

Section snippets

Introduction and overview

Data description

Main results and discussion

Conclusions and future work

Acknowledgment

Resource and Energy Economics

Ecological Economics

Energy Policy

Resource and Energy Economics

Economics Letters

Energy Economics

Resource and Energy Economics

Why do new technologies complement skills? Directed technical change and wage inequality

The Quarterly Journal of Economics

Directed technical change

Review of Economic Studies

The skill bias of technological change in Canadian manufacturing industries

The Review of Economics and Statistics

The measurement of technical change biases with many factors of production

American Economic Review

Economies of scale in U.S. electric power generation

The Journal of Political Economy

Transcendental logarithmic production frontiers

Review of Economics and Statistics

An Introduction to State Space Time Series Analysis

The optimal depletion of exhaustible resources

Review of Economic Studies