Corruption induced energy inefficiencies: Evidence from China's energy investment projects

China is currently having a lot of conversations about energy and corruption. This research explores how corruption and energy investment affect energy efficiency by employing statistical methodologies and analyzing data spanning from 2000 to 2017. The research findings indicate that corruption has a detrimental effect on energy efficiency. Further analysis reveals that energy investment acts as a mediator in this relationship. The influence of corruption on energy efficiency varies depending on the endowment of energy resources and the level of performance pressure. Regions with lower endowments of energy resources experience a greater detrimental impact of corruption on energy efficiency. However, in regions with higher endowments of energy resources, energy investment has a complete mediating effect. In regions with lower performance pressure, corruption significantly reduces energy efficiency, whereas, in regions with higher performance pressure, the mediating role of energy investment is more prominent. The approval system reform in the energy investment sector since 2013 has reduced the adverse impact of corruption on energy investment and, consequently, on energy efficiency. These research findings offer valuable insights for the Chinese government to address shortcomings, combat corruption in the energy sector, optimize energy investment, and enhance energy efficiency further. •Corruption has a negative impact on energy efficiency.•Energy investment acts as a mediator between corruption and energy efficiency.•Reform of the approval system for energy investment projects since 2013 has been effective.•We take into account energy endowments and governments' performance pressure heterogeneity across regions.