“Neighbors as competitors” or “neighbors as partners”: How does market segmentation affect regional energy efficiency in China?

Liang Nie and ZhongXiang Zhang

No 301033, FEP: Future Energy Program from Fondazione Eni Enrico Mattei (FEEM) > FEP: Future Energy Program

Abstract: Existing studies have focused on the negative impact of inefficient resource allocation on energy performance in China’s factor market, but neglected to further explore the underlying reason for this phenomenon from the perspective of market segmentation. In this paper, the epsilon-based measure model, which combines the merits of radial and non-radial Data Envelopment Analysis, is employed to measure the energy efficiency, and price index method derived from Iceberg Transport Cost model is used to examine the degrees of market segmentation. On the basis, we use the Tobit model to empirically investigate the impact of market segmentation on China’s energy efficiency. The results show that although energy efficiency in the eastern region is higher than that in the central and western regions, the energy efficiency gap is narrowing significantly between the eastern and central, but insignificantly between the western and eastern. Although efforts have been made towards a unified national market, the western provinces still have more segmented markets than the eastern still. Econometric analysis indicates that market segmentation is negative to China’s energy efficiency significantly. This finding remains robust even if the endogeneity is excluded and the dependent variable is re-measured by the slack-based measure model, but is of a regional heterogeneity. We also find that factor market distortion, enterprises’ R&D investment, and industrial agglomeration are three mediation mechanisms through which market segmentation affects energy efficiency. In-depth analysis indicates that there is a Race to the Top competition centering on market segmentation among Chinese local officials in geospatial and economic space, which triggers a long-term inhibition to energy efficiency.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 33
Date: 2020-01-22
New Economics Papers: this item is included in nep-ene, nep-tra and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/301033/files/NDL2019-027.pdf (application/pdf)

Related works:
Working Paper: “Neighbors as competitors” or “neighbors as partners”: How does market segmentation affect regional energy efficiency in China? (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:feemfe:301033

DOI: 10.22004/ag.econ.301033

Access Statistics for this paper

More papers in FEP: Future Energy Program from Fondazione Eni Enrico Mattei (FEEM) > FEP: Future Energy Program Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().