DECOMPOSITION OF GROWTH FACTORS IN HIGH-TECH INDUSTRIES AND CO2 EMISSIONS: AFTER THE WORLD FINANCIAL CRISIS IN 2008

Taiwan’s economic development faces two problems, one is the imbalance of the economic structure, and the other is that the industrial structure must be upgraded. This is a problem that has existed since the 1990s, but it has not been solved for a long time. The outbreak of the world financial crisis in 2008 severely damaged the international economy and finance, and Taiwan suffered a huge economic shock. In the face of an economic predicament, Taiwan attempts to transform the unbalanced economic system through technological innovation through public investment and the updating of corporate equipment, and sets the goal of sustainable development, of which high-tech industries have become the focus of economic development. This paper takes the financial crisis as the research period, analyzes the growth of the industries and their causes through the economic growth decomposition model, and estimates the CO2 emissions generated, which will help understand Taiwan’s future economic development. The research results show that the growth of high-tech industries after the financial crisis is dominated by semiconductors and power equipment-related industries. The growth factor is innovation of input technology and the improvement of self-sufficiency. At the same time, CO2 emissions are mainly caused by these two factors.


INTRODUCTION
From 1981 to 2016, Taiwan underwent liberalization, internationalization, and global economic changes. In the course of economic development during these 35 years, except for the Internet bubble economy in the United States in 2002 and the impact of the global financial crisis in 2009, Taiwan has shown economic growth. After joined the World Trade Organization (WTO) in 2002, Taiwan became a member of the WTO, and expanding international trade has changed the industrial structure. In 1981, the GDP of agriculture, industry, and services accounted for 7.35%, 43.83%, and 48.82% of the overall industry. By 1988, the service industry had exceeded 50%, and the proportion of agricultural output value had dropped significantly. The proportion of primary industries has gradually declined and the proportion of tertiary industries has gradually increased. By 2016, the agricultural, industrial and service industries' GDP ratios were 1.82%, 35.06% and 63.13%, respectively. In other words, Taiwan's industrial structure has changed a lot after joining the WTO.
After the 1960s, Taiwan's sustained high growth was through employment creation and economic development through the trade export industry. However, in the 1980s, liberalization and market opening, the pace of industrial innovation could not keep up with competitors' price strategies, and Taiwan 's economy could not be as fast as in the past continue to grow. Since import and export trade has become the main economic structure, the volume of trade has become an important factor in the change of industrial structure. Especially after the Plaza Agreement in 1985, the appreciation of the currency led to a substantial increase in trade volume. Imports and exports have gradually become an important factor in Taiwan's economic growth. In 2005, it exceeded 200 billion US dollars, and the value of imports and exports has expanded.
The crisis of the world financial tsunami was triggered in September 2008. The export trade volume has fallen sharply from a growth of more than 10% in the first 8 months, and has begun to turn negative growth in the third quarter. By the first quarter of 2009, Taiwan's exports The decline was expanded to −26.87%. In order to respond to economic losses caused by financial shocks, Taiwan has implemented multiple fiscal policies and expanded public investment so that economic growth can gradually return to stability. Among them, Taiwan attaches great importance to the research and innovation of high-tech industries and plays an important role in economic development. The total value of trade in 2014 was a record high of $ 601.9 billion. Judging from the GDP value of imports and exports, imports and exports accounted for 43.28% and 46.24% each in 1981, and have increased to 43.51% and 52.90% in 2016.
The financial crisis has raised Taiwan's focus on the development of high-tech industries. In addition, energy policies are also adjusted under environmental protection. Taiwan's investment in renewable energy generation systems attempts to provide more sources of electricity to achieve economic development and environmental protection. In order to achieve research objectives, this paper will analyze the growth factors of high-tech industries after the financial crisis, and discuss the relationship between power consumption and CO 2 emissions, which will help to understand the direction of Taiwan's industrial structure adjustment in the future. In order to obtain more specific data to analyze the research topic of this thesis, a factor decomposition model of the high-tech industry will be established in section 3 to establish two factor decomposition models of CO 2 emissions.

LITERATURE REVIEW
The past literature on the relationship between the economy and the environment can be divided into several stages of research. The early literature focused on the relationship between economic growth and environmental pollutants. The analytical point of view is represented by the Environmental Kuznets Curve (EKC) (Lee and Lee, 2009;Ang, 2007;Saboori et al., 2012). The EKC hypothesis suggests that the level of environmental pollution will increase with the country's economic development, but will start to decrease as the national income increases beyond the turning point (Dinda, 2004).
With the rapid increase of energy consumption caused by economic development, the research focus has gradually shifted to the impact of energy (electricity) use on environmental loads (e.g. Kraft and Kraft, 1978;Payne, 2010a;Payne, 2010b;Ozturk, 2010 Ozturk andAcaravci, 2011;Farhani et al., 2014;Bella et al., 2014;Dogan, 2015;Njoke et al., 2019;Sunde, 2020). In addition, many studies often use Granger causality to analyze the relationship between economic growth and energy consumption, and further analyze the relationship between economic growth, energy consumption and environmental pollution. However, in many studies, the relationship between economic development, energy consumption, and pollution in different countries has different results. Njoke et al. (2019) points out the relationship between Cameroon's power consumption, carbon emissions and economic growth from 1971 to 2014. The study indicates that there is a significant relationship between CO 2 emissions and economic growth, whether short-term or long-term. However, studies have shown different results. For example, Ozturk and Acaravci (2011) pointed out that there is no relationship between electricity consumption and economic growth in most Middle East and North Africa countries. There are also numerous studies analyzing the relationship between energy consumption and environmental damage, such as Yavuz and Yilanci (2013), Presno et al. (2018), and Aydin and Esen (2018).
Because economic growth brings changes in the industrial structure, and the relationship between the economy and the environment is often subject to the influence of industrial structure styles, changes in the industrial structure will cause different results. In addition, attention has been paid to the adjustment of power sources. In recent years, there has been an increasing trend in research on renewable energy (Dogan, 2015;Bölük and Mert, 2015). However, with the development of globalized economy, economic growth has indeed caused significant environmental impacts (Dreher, 2006;Managi and Kumar, 2009;Jorgenson and Givens, 2014;Li et al., 2015;Doytch and Uctum, 2016;You and Lv, 2018;Saint Akadiri et al., 2019). Managi and Kumar (2009) research pointed out that trade does have an adverse effect on CO 2 emissions, and Doytch and Uctum (2016) also believe that improper investment activities will cause environmental damage. In addition, Dreher (2006) proposed that the global economy should invest in green related industries to improve the environment.

METHODOLOGY AND DATA
This research model is a factor decomposition model established by I-O Tables (Input-Output Tables) in different periods. It is considered that there are changes in prices and quantities in economic growth in different periods. In addition, the analysis period of this paper is set between 2011 and 2016. Therefore, the establishment of the model of this paper needs to be processed through substantial processes in order to make the two periods industry price benchmarks are consistent. This section uses Fujita and William (1997), Hong et al. (2018), and Hong et al. (2019) to build the following three models.

The Decomposition Model of High-tech Industries Growth
The equilibrium equation of the I-O model of the high-tech industry can be expressed by the quantity equations (1).
Where, the definition of each variable in the equation is as follows X is a vector representing the total output of the industry (n × 1); A represents the input coefficient matrix (n × n). As matrix A reflects technology of production, it is usually called technological matrix; F is the domestic final demand vector (n × 1); E is the export vector (n × 1); M is the diagonal determinant of the import coefficient (n × n).
t and t + 1 represent the base year and the comparative year. The changes in the two periods can be written as: (2) (2), resulting in the following modifications:

The Decomposition Model of CO 2 Emissions Growth
This section uses equation (3) to establish a CO 2 emissions growth model. This will require an estimation of the industry's CO 2 emissions coefficient. The model building process is shown below.
CO 2t and CO 2t+1 represent CO 2 emissions in t years and t+1 years.
, and Ĉ is the diagonal matrix of the elements of the emissions coefficients for various industries.

Analysis of Growth Factors of High-tech Industries after the Financial Crisis
The growth of the high-tech industry since the 1990s has been the main factor driving Taiwan's economic development. This section empirically analyzes whether this trend has changed after the financial crisis. At the same time, what factors will change the high-tech industry? On the other hand, does the growth of high-tech industries also change in CO 2 emissions? This will also be the focus of this section. Because high-tech industries include a variety of different industries, in order to be able to more fully identify the characteristics of industrial development, this section divides high-tech industries into three major industrial groups according to the nature of the industry, namely "semiconductor related industries," "computer and electronics related industries," and "power system related industries." Table 1 shows the growth scale of "semiconductor related industries" during 2011-2016. From Table 1, we can see that the semiconductors industry has the largest growth, which accounts for 75.04% (NT$ 1,315,252 million) of "semiconductor related industries," while the passive electronic components sector has the least growth, only NT$ 46,873 million.

Growth factors of semiconductor related industries
The biggest factor in the growth of the semiconductors industry comes from the improvement of self-sufficiency, which is increasing the proportion of domestic industrial manufacturing, which means that this sector has improved the integrity of the domestic production chain after the financial crisis. In addition, the improvement of input technology created the semiconductors industry by NT$ 306,952 million, which accounted for 23.34% of the total. On the other hand, the biggest factor driving the growth of "semiconductor related industries" is the technological innovation of input technology, which contributed NT$ 638,346 million, which accounted for 36.42% of the total growth (=NT$ 638,346 million/NT$ 1,752,843 million).

Growth factors of computer and electronics related industries
The computer and electronics industries are the foundation of hightech industries. However, after the 1990s, these related industries were largely transferred from Taiwan to Chinese production. From Table 2, we can see that the changes in computer and electronics related industries have shown negative growth (-NT$ 541,763 million). The largest reduction was in the communications industry, which was about NT $ 472,008 million. The biggest factor that caused the reduction of the communication industry was exports (-NT$ 466,976million), followed by domestic final demand (-NT$ 102,949 million).
Despite the negative growth of "computer and electronics related industries," there are also growing industries, which include Computer products, Computer peripherals and Measurement, navigation, control and other industries. The main factor for these growing industries comes from input technology, which shows that technological innovation is still a necessary condition for Taiwan's industrial development.

Growth factors of power system related industries
Taiwan has promoted the transformation of power generation systems from 2017, and it is particularly important to observe the growth and changes of "power system related industries." Table 3 shows the growth of power system related industries between 2011 and 2016. It can be seen from the table that the growth of other power equipment and transportation related industries is the largest, accounting for about 142.00% and 67.85% of the "power system related industries." After the financial crisis, innovation in input technology was the biggest factor driving the growth of "power system related industries." This factor created a total value of NT$ 436,951 million, and self-sufficiency and final goods imports factors also created NT$ 202,381 million, NT$ 78,302 million. The transformation of energy sources requires new technologies and investments, as well as changes in the relevant legal systems of energy supply. This is a major reform project. Therefore, Table 3 shows that the related industries of the power system have improved significantly in terms of technological innovation and self-sufficiency.

Analysis of CO 2 -emissions Changes of High-tech Industries after the Financial Crisis
Economic growth and increased energy consumption may also lead to more CO 2 emissions. This section estimates the scale of CO 2 emissions from economic growth in Section 4.1. Table 4 shows the CO 2 emissions increased by "semiconductor related industries" during the period of 2011-2016, and it can be known from the data that this industry group has increased by a total of 5,446,876 tons during the 5-year period. This result is mainly due to the improvement of input technology to increase production. Among them, the growth rate of the Semiconductors industry is the most obvious, with a total increase of CO 2 emissions of about 4,087,083 tons.  On the whole, although "semiconductor related industries" can also create industry growth after the financial crisis, CO 2 emissions are also showing positive growth from the five factors in the table.

The CO 2 emissions factors of computer related industries
The performance of CO 2 emissions in the "computer and electronics related industries" group is shown in Table 5. It can be seen from the table that the largest increase in CO 2 emissions is in the computer-related industries. Among them, Computer products and Computer peripherals increased by 98,777 tons and 63,962 tons respectively.
Due to the impact of the financial crisis, the negative wealth effect reduced the demand for domestic final demand and exports, which indirectly contributed to the reduction of CO 2 emissions. These two factors reduced CO 2 emissions by 385,741tons and 2,284,528 tons, respectively.

The CO 2 emissions factors of power system related industries
Economic development requires electricity security and stable supply, while also taking into account environmental preservation to improve the quality of life. The analysis period of this paper is only up to 2016, and it does not include the energy transition policies after 2017. Therefore, the growth of "power system related industries" in Table 6 is only reflected in the estimated data under the past power generation system.
Due to the reduction of domestic final demand and exports caused by the financial crisis, these two factors have reduced CO 2 emissions by 1,142,499 tons and 396,940 tons, of which the professional machinery industry is the most significant. The wires, cables and wiring related industries reduced CO 2 emissions by 475,015 tons. On the other hand, the main industries with increased CO 2 emissions are other power equipment (980,619 tons) and Transportation related (468,523 tons).

CONCLUSIONS AND POLICY IMPLICATIONS
Taiwan's economic development is facing an imbalance between the economic structure and the industrial structure. The world financial crisis in 2008 caused huge economic losses and increased unemployment. In the future, Taiwan's economic planning will focus on the economic goals of industrial restructuring and sustainable development. The key to accomplishing this economic goal lies in the success of the development of high-tech industries in the future. This research is to analyze the economic and industrial changes after the financial crisis, and to analyze the factors of industrial growth and change with the industry's composition model. This will help to understand and follow the trend of Taiwan's economic development, and can provide specific suggestions. From the above empirical results, the following points are summarized.
The high-tech industry is centered on machinery-related industries. The growth during the 5 years after the financial crisis (2011)(2012)(2013)(2014)(2015)(2016) created an increase of NT $ 1,433,312 million, accounting for 27.61% of GDP growth. In the high-tech industry, Semiconductors, power equipment and electronic components-related industries have grown the most. In addition, the growth of high-tech industries is mainly affected by the innovation of input technology and the improvement of self-sufficiency. The former can improve production efficiency and industrial upgrading, while the latter can improve domestic employment opportunities and industrial structure transformation. Therefore, after the financial crisis, although Taiwan's economy suffered great economic damage, it also stimulated technological innovation and increased the proportion of domestic industrialization. Nevertheless, under the dual goals of environmental protection and economic growth, how to reduce CO 2 emissions is an important issue for Taiwan at present. Empirical evidence shows that the high-tech industry is still subject to the financial crisis and has shown significant growth, which has also increased CO 2 emissions. Among them, Semiconductors have increased the most, accounting for more than 90% of the total high-tech.