ThisstudyproposedadecompositionmethodbasedonthenormalizedquadraticshadowunitcostfunctiontoexplorethedeterminantsofthechangeinenergyintensityinChinafrom1985to2010.Thedecompositionanalysisindicatesthat(1)theimprovementintechnicalefficiencydramaticallyreducedtheenergyintensity,whereastechnologicalchangeplayedonlyaminorrole,whichcouldbeattributedtoareboundeffect;(2)theaggregatedallocationeffectwassmallbecausethechangeintheallocativedistortionbetweencapitalandenergysignificantlyenhancedenergyintensitybutwaspartlyoffsetbytheeffectstemmingfromthechangeintheallocativedistortionbetweencapitalandenergy;and(3)thesubstitutionofenergyforlaborincreasedenergyintensity,buttheaggregatedsubstitutioneffectsignificantlyreducedenergyintensitybecausethesubstitutionofcapitalforenergyreducedenergyintensitytoagreatextent.Thesefindingswereobtainedatthenationallevelandvariedatdieregionallevel.
