Does energy research funding work? Evidence from the Natural Science Foundation of China using TEI@I method

Improving energy productivity is a top priority for China, and funding recearch projects may be an effective way to achieve the goal. Therefore, how to evaluate and find ways to enhance the promote effect of energy related research funding on energy productivity is urgent and meaningful. This paper uses the TEI@I method. In the first stage, we construct a total-factor energy productivity index (TEPI) based on the global non-radial directional distance function (GNDDF) and Malmquist index to illustrate the dynamic change of energy productivity growth for China during the period 2006-2015. We find that the TEPI shows a rising trend for most of the study period and is mainly driven by the technological progress. In the second stage, we use the econometric approach. The energy related research funding sponsored by the Natural Science Foundation of China (NSFC) has exerted remarkable positive effect on raising the TEPI and the technical progress in the process of energy use. We further propose some policy implications to enhance the promote effect of NSFC funding on raising the TEPI.