7. Conclusion
This paper reconciles the literature of energy efficiency economics and that of corporate environmental management within an analytic framework, and explains firms' energy efficiency strategies under multiple policies based on cases in China's Jiangsu Province. The use of Chinese examples also opens a window on how industrial firms respond to energy efficiency policy directives. Two types of decision processes are identified, featuring different motivations, capabilities, and external factors, especially the regulatory context. In most cases, firms invest in energy-saving technologies incrementally to reduce operational cost, and to maintain positive government relationships when facing voluntary programs or informal requirements. Their decisions are supported by informational, organizational, and financing capabilities, and are facilitated by financing programs and a more competitive and cohesive environment. Alternatively, firms facing stringent regulations on their plant and equipment try to survive or expand with a better position under local governance, through complete facility replacement and technology adoption, and sometimes by making contributions to the local community.
Our cases are collected in four industries from four cities with observations spanning multiple years. Because the four selected industries feature heterogeneity in production processes, products, market dynamics, and regulatory contexts, the cases should be generalizable to other energy-intensive manufacturing industries, such as textiles, nonferrous metals, and petroleum. Similarly, the huge gap in development levels and regulatory stringency across the cities make the findings generalizable to many other regions outside Jiangsu Province. Future research can rely on the dichotomy of firm motivations and decision processes to quantify the effect of external and internal factors on firms' energy efficiency investment.
