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Impact of Energy Market Distortions on the Productivity of Energy Enterprises in China

Weijian Du, Mengjie Li, Ke Li, and Jiang Lin

Year: 2021
Volume: Volume 42
Number: Number 4
DOI: 10.5547/01956574.42.4.wdu
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Abstract:
China aims to enhance its total factor productivity (TFP) to achieve sustainable development. However, the looming energy market reform and its accompanying energy distortions prevent the realization of this ambitious goal. This study first establishes a theoretical model to reveal the inhibitory effects of energy market distortions on the TFP of energy enterprises, and we examine this issue using the micro-data of Chinese energy enterprises. The empirical results indicate that relative distortions among energy enterprises and overall distortions in different regions significantly inhibit the promotion of energy enterprises TFP, but the marginal inhibitory effects are diminishing. Energy market distortions also inhibit enterprises' entry and accelerate enterprises' exit from the energy market. Thus, eliminating inappropriate interventions in micro-energy enterprises, establishing a unified national energy market, and improving the competitive environment of energy companies are of great theoretical and policy importance.



Market Segmentation and Energy Efficiency: Evidence from China’s Regional Economies

Liang Nie and ZhongXiang Zhang

Year: 2022
Volume: Volume 43
Number: Number 6
DOI: 10.5547/01956574.43.6.lnie
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Abstract:
Existing studies have focused on the negative impact of inefficient resource allocation on energy performance in China, but neglected to explore the underlying reason for this phenomenon from the perspective of market segmentation. To fill this research gap, the epsilon-based measure model is used to estimate energy efficiency, and the measurement method of market segmentation is improved in this paper. On the basis of a theoretical hypothesis, we use fractional regression models to conduct empirical research. The results show that market segmentation has a significant negative effect on China's energy efficiency. Additionally, this inhibitory effect is robust but heterogeneous. The impact mechanism test indicates that energy price distortion, enterprise technology innovation, and industrial agglomeration are three intermediate influence channels. Based on these analyses, we suggest that China should accelerate market-oriented reform and eliminate market segmentation in pursuit of energy-saving and emission-abating goals.





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