The emergence and evolution of regional convergence clusters in China's energy markets

Hengyun Ma and Les Oxley

Energy Economics, 2012, vol. 34, issue 1, 82-94

Abstract: Employing the new regression tests for Convergence, Club Convergence and Clustering proposed by Phillips and Sul (2007), this paper models and analyses the behaviour of China's energy sectors. Energy market ‘convergence clusters’ are identified using new price data, and their regional spatial distributions are mapped for four major fuel types: coal, gasoline, diesel and electricity. The findings are as follows: i) as yet, there are no fully integrated national energy markets in China, as more than one convergence cluster is identified for all four fuels; ii) some regional energy markets can be regarded as ‘quite mature,’ as evidenced by the existence of some highly concentrated convergence clusters connected geographically; iii) some regional markets remain in a ‘state of transition,’ as witnessed by convergence clusters that are scattered geographically and that are growing in membership; iv) it seems that there is more regional-based integration for coal and electricity than for gasoline and diesel, as more convergent clusters were identified for coal and electricity than for gasoline and diesel; and v) overall, China still appears to be in the process of energy market integration, as demonstrated by the number and evolution of convergence clusters over time.

Keywords: China; Energy market; Convergence cluster (search for similar items in EconPapers)
JEL-codes: D24 O33 Q41 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Working Paper: The Emergence and Evolution of Regional Convergence Clusters in China’s Energy Markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:34:y:2012:i:1:p:82-94

DOI: 10.1016/j.eneco.2011.02.015

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