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.
AvkiranNecmi KemalToneKaoruTsutsuiMiki (2008). “Bridging Radial and Non-Radial Measures of Efficiency in DEA.” Annals of Operations Research164(1): 127–138. https://doi.org/10.1007/s10479-008-0356-8.
2.
BaiJunhongLuJiayuLiSijia (2019). “Fiscal Pressure, Tax Competition and Environmental Pollution.” Environmental and Resource Economics73(2): 431–447. https://doi.org/10.1007/s10640-018-0269-1.
3.
BaronReuben M.KennyDavid A. (1986). “The Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations.” Journal of Personality and Social Psychology51(6): 1173. https://doi.org/10.1037/0022-3514.51.6.1173.
4.
BigernaSimonaD’ErricoMaria ChiaraPolinoriPaolo (2019). “Environmental and Energy Efficiency of EU Electricity Industry: An Almost Spatial Two Stages DEA Approach.” The Energy Journal40: 29–54. https://doi.org/10.5547/01956574.40.1.sbig.
5.
BoldrinMicheleLevineDavid K. (2004). “Rent-Seeking and Innovation.” Journal of Monetary Economics51(1): 127–160. https://doi.org/10.1016Zj.jmoneco.2003.07.006.
6.
ChatzistamoulouNikosKounetasKostasTsekourasKostas (2019). “Energy Efficiency, Productive Performance and Heterogeneous Competitiveness Regimes. Does the Dichotomy Matter?” Energy Economics81: 687–697. https://doi.org/10.1016/j.eneco.2019.05.005.
7.
ChenShiyiGolleyJane (2014). “’Green’ Productivity Growth in China’s Industrial Economy.” Energy Economics44: 89–98. https://doi.org/10.1016/j.eneco.2014.04.002.
8.
ChoiYongrokZhangNingZhouPeng (2012). “Efficiency and Abatement Costs of Energy-Related CO2 Emissions in China: A Slacks-Based Efficiency Measure.” Applied Energy98: 198–208. https://doi.org/10.10167j.apenergy.2012.03.024.
9.
ClaessensStijnFeijenErikLaevenLuc (2008). “Political Connections and Preferential Access to Finance: The Role of Campaign Contributions.” Journal of Financial Economics88(3): 554–580. https://doi.org/10.1016/jjfineco.2006.11.003.
10.
DaiXiaoyongChengLiwei (2016). “Market Distortions and Aggregate Productivity: Evidence From Chinese Energy Enterprises.” Energy Policy95: 304–313. https://doi.org/10.1016/j.enpol.2016.05.009.
11.
DuLiminWeiChuCaiShenghua (2012). “Economic Development and Carbon Dioxide Emissions in China: Provincial Panel Data Analysis.” China Economic Review23(2): 371–384. https://doi.org/10.1016/j.chieco.2012.02.004.
12.
DuttaAnupamBouriElieHasibMd Noor (2018). “Return and Volatility Linkages between CO2 Emission and Clean Energy Stock Prices.” Energy164: 803–810. https://doi.org/10.1016/j.energy.2018.09.055.
13.
ElliottRobert J.R.SunPuyangChenSiyang (2013). “Energy Intensity and Foreign Direct Investment: A Chinese City-Level Study.” Energy Economics40: 484–494. https://doi.org/10.1016/j.eneco.2013.08.004.
14.
ElliottRobert J.R.SunPuyangZhuTong (2017). “The Direct and Indirect Effect of Urbanization on Energy Intensity: A Province-Level Study for China.” Energy123: 677–692. https://doi.org/10.1016/j.energy.2017.01.143.
15.
FäreRolfGrosskopfShawnaPasurkaCarl A.Jr (2007). “Environmental Production Functions and Environmental Directional Distance Functions.” Energy32(7): 1055–1066. https://doi.org/10.1016/j.energy.2006.09.005.
16.
FengTaiwenSunLinyanZhangYing (2009). “The Relationship between Energy Consumption Structure, Economic Structure and Energy Intensity in China.” Energy Policy37(12): 5475–5483. https://doi.org/10.1016/j.enpol.2009.08.008.
17.
GuoXiao-DanZhuLeiFanYingXieBai-Chen (2011). “Evaluation of Potential Reductions in Carbon Emissions in Chinese Provinces Based on Environmental DEA.” Energy Policy39(5): 2352–2360. https://doi.org/10.1016/j.en-pol.2011.01.055.
18.
HeQichun (2015). “Fiscal Decentralization and Environmental Pollution: Evidence from Chinese Panel Data.” China Economic Review36: 86–100. https://doi.org/10.1016/j.chieco.2015.08.010.
19.
HoMun S.NielsenChris P. (2007). Clearing the Air: The Health and Economic Damages of Air Pollution in China. Cambridge, MA:: MIT Press. https://doi.org/10.7551/mitpress/1866.001.0001.
20.
HuJin-LiWangShih-Chuan (2006). “Total-Factor Energy Efficiency of Regions in China.” Energy policy34.17: 3206–3217. https://doi.org/10.1016/j.enpol.2005.06.015.
21.
KieschnickRobertMoussawiRabih (2018). “Firm Age, Corporate Governance, and Capital Structure Choices.” Journal of Corporate Finance48: 597–614. https://doi.org/10.1016/j.jcorpfin.2017.12.011.
22.
LanoiePaulPatryMichelLajeunesseRichard (2008). “Environmental Regulation and Productivity: Testing the Porter Hypothesis.” Journal of Productivity Analysis30(2): 121–128. https://doi.org/10.1007/s11123-008-0108-4.
23.
LiJianglongLinBoqiang (2017). “Does Energy and CO2 Emissions Performance of China Benefit from Regional Integration?” Energy Policy101: 366–378. https://doi.org/10.1016/j.enpol.2016.10.036.
24.
LiKeLinBoqiang (2014). “The Nonlinear Impacts of Industrial Structure on China’s Energy Intensity.” Energy69: 258–265. https://doi.org/10.1016/j.energy.2014.02.106.
25.
LiKeLinBoqiang (2015). “How Does Administrative Pricing Affect Energy Consumption and CO2 Emissions in China?” Renewable and Sustainable Energy Reviews42: 952–962. https://doi.org/10.1016/j.rser.2014.10.083.
26.
LiLan-BingHuJin-Li (2012). “Ecological Total-Factor Energy Efficiency of Regions in China.” Energy Policy46: 216–224. https://doi.org/10.1016/j.enpol.2012.03.053.
27.
LinBoqiangDuKerui (2015). “Energy and CO2 Emissions Performance in China’s Regional Economies: Do Market-Oriented Reforms Matter?” Energy Policy78: 113–124. https://doi.org/10.1016/j.enpol.2014.12.025.
28.
LinJustin YifuLiuZhiqiang (2000). “Fiscal Decentralization and Economic Growth in China.” Economic Development and Cultural Change49(1): 1–21. https://doi.org/10.1086/452488.
29.
LuJustin YifuTaoZhigang (2009). “Trends and Determinants of China’s Industrial Agglomeration.” Journal of Urban Economics65(2): 167–180. https://doi.org/10.1016/j.jue.2008.10.003.
30.
MaBen (2015). “Does Urbanization Affect Energy Intensities across Provinces in China? Long-Run Elasticities Estimation Using Dynamic Panels with Heterogeneous Slopes.” Energy Economics49: 390–401. https://doi.org/10.1016/j.eneco.2015.03.012.
31.
NewellRichard G.JaffeAdam B.StavinsRobert N. (1999). “The Induced Innovation Hypothesis and Energy-Saving Technological Change.” The Quarterly Journal of Economics114(3): 941–975. https://doi.org/10.1162/003355399556188.
32.
O’DonoghueDanGleaveBill (2004). “A Note on Methods for Measuring Industrial Agglomeration.” Regional Studies38(4): 419–427. https://doi.org/10.1080/03434002000213932.
33.
OuyangXiaolingSunChuanwang (2015). “Energy Savings Potential in China’s Industrial Sector: From the Perspectives of Factor Price Distortion and Allocative Inefficiency.” Energy Economics48: 117–126. https://doi.org/10.1016/j.eneco.2014.11.020.
34.
PanXiongfengPengXiaoxueLiBin (2017). “Market Distortion, Technical Progress and Energy Efficiency: Policy Choice Based on the Provincial Heterogeneity.” The Journal of World Economy (1): 91–115 (in Chinese).
35.
PapkeLeslie E.WooldridgeJeffrey M. (1996). “Econometric Methods for Fractional Response Variables with An Application to 401 (k) Plan Participation Rates.” Journal of Applied Econometrics11(6): 619–632. https://doi.org/10.1002/(SICI)1099-1255(199611)11:6<619::AID-JAE418>3.0.CO;2-1.
36.
PapkeLeslie E.WooldridgeJeffrey M. (2008). “Panel Data Methods for Fractional Response Variables with An Application to Test Pass Rates.” Journal of Econometrics145(1-2): 121–133. https://doi.org/10.1016/j.jeconom.2008.05.009.
37.
ParsleyDavid C.WeiShang-Jin (2001). “Explaining the Border Effect: The Role of Exchange Rate Variability, Shipping Costs, and Geography.” Journal of International Economics55(1): 87–105. https://doi.org/10.1016/S0022-1996(01)00096-4.
38.
PoncetSandra (2003). “Measuring Chinese Domestic and International Integration.” China Economic Review14(1): 1–21. https://doi.org/10.1016/S1043-951X(02)00083-4.
39.
PoncetSandra (2005). “A Fragmented China: Measure and Determinants of Chinese Domestic Market Disintegration.” Review of International Economics13(3): 409–430. https://doi.org/10.1111/j.1467-9396.2005.00514.x.
40.
PsacharopoulosGeorgeAnthonyHarry Patrinos (2004). “Returns to Investment in Education: A Further Update.” Education Economics12(2): 111–134. https://doi.org/10.1080/0964529042000239140.
41.
QiaoBaoyunMartinez-VazquezJorgeXuYongsheng (2008). “The Tradeoff between Growth and Equity in Decentralization Policy: China’s Experience.” Journal of Development Economics86(1): 112–128. https://doi.org/10.1016/j.jdeveco.2007.05.002.
42.
RamalhoEsmeralda A.RamalhoJoaquim JS (2017). “Moment-Based Estimation of Nonlinear Regression Models with Boundary Outcomes and Endogeneity, with Applications to Nonnegative and Fractional Responses.” Econometric Reviews36(4): 397–420. https://doi.org/10.1080/07474938.2014.976531.
43.
RamalhoEsmeralda A.RamalhoJoaquim JSHenriquesPedro D. (2010). “Fractional Regression Models for Second Stage DEA Efficiency Analyses.” Journal of Productivity Analysis34(3): 239–255. https://doi.org/10.1007/s11123-010-0184-0.
44.
SarganJohn D (1958). “The Estimation of Economic Relationships Using Instrumental Variables.” Econometrica26(3): 393–415. https://doi.org/10.2307/1907619.
45.
ShanHaojie (2008). “Re-estimating the Capital Stock of China: 1952-2006.” The Journal of Quantitative & Technical Economics (10): 17–31 (In Chinese).
46.
ShaoShuaiChenYangaLiKeYangLili (2019). “Market Segmentation and Urban CO2 Emissions in China: Evidence from the Yangtze River Delta region.” Journal of Environmental Management248: 109324. https://doi.org/10.1016/j.jenvman.2019.109324.
47.
SlesnickDaniel T (2002). “Prices and Regional Variation in Welfare.” Journal of Urban Economics51(3): 446–468. https://doi.org/10.1006/juec.2001.2253.
48.
SobelMichael E (1982). “Asymptotic Confidence Intervals for Indirect Effects in Structural Equation Models.” Sociological Methodology13: 290–312. https://doi.org/10.2307/270723.
49.
StergiouEiriniKounetasKostas (2021). “European Industries’ Energy Efficiency under Different Technological Regimes: The Role of CO2 Emissions, Climate, Path Dependence and Energy Mix.” The Energy Journal42(1): 93–128. https://doi.org/10.5547/01956574.42.1.este.
50.
SternDavid I (2012). “Modeling International Trends in Energy Efficiency.” Energy Economics34(6): 2200–2208. https://doi.org/10.1016/j.eneco.2012.03.009.
51.
StockJames H.YogoMotohiro (2005). “Testing for Weak Instruments in Linear IV Regression.” In: AndrewsD.W.K.StockJ.H., eds. Identification and Inference for Econometric Models: Essays in Honor of Thomas Rothenberg. Cambridge, UK: Cambridge University Press, 80–108. https://doi.org/10.1017/CBO9780511614491.006.
52.
The British Petroleum Company plc (2020). BP Statistical Review of World Energy. London, UK.
53.
The World Bank (2007). Cost of Pollution in China: Economic Estimates of Physical Damages. Washington, D.C.
54.
TianTianChangMiaoShiFengTanikawHiroki (2014). “How Does Industrial Structure Change Impact Carbon Dioxide Emissions? A Comparative Analysis Focusing on Nine Provincial Regions in China.” Environmental Science & Policy37: 243–254. https://doi.org/10.1016/j.envsci.2013.10.001.
55.
ToneKaoru (2001). “A Slacks-Based Measure of Efficiency in Data Envelopment Analysis.” European Journal of Operational Research130(3): 498–509. https://doi.org/10.1016/S0377-2217(99)00407-5.
56.
ToneKaoruTsutsuiMiki (2010). “An Epsilon-Based Measure of Efficiency in DEA-A Third Pole of Technical Efficiency.” European Journal of Operational Research207(3): 1554–1563. https://doi.org/10.1016/j.ejor.2010.07.014.
57.
WangXiaoluFanGangYuJingwen (2017). “Marketization Index of China’s Provinces: NERI Report 2016.” Social Sciences Academic Press: Beijing, China.
58.
WooldridgeJeffrey M (2012). Introductory Econometrics: A Modern Approach. Cengage learning.
59.
XuXinpeng (2002). “Have the Chinese Provinces Become Integrated under Reform?” China Economic Review 13(2-3): 116–133. https://doi.org/10.1016/S1043-951X(02)00058-5.
60.
YanHuijie (2015). “Provincial Energy Intensity in China: The Role of Urbanization.” Energy Policy86: 635–650. https://doi.org/10.1016/j.enpol.2015.08.010.
61.
YangHuijieYangFuxiaSunChuanwang (2018). “Factor Market Distortion Correction, Resource Reallocation and Potential Productivity Gains: An Empirical Study on China’s Heavy Industry Sector.” Energy Economics69: 270–279. https://doi.org/10.1016/j.eneco.2017.11.021.
62.
YangZhou (2016). “Tax Reform, Fiscal Decentralization, and Regional Economic Growth: New Evidence from China.” Economic Modelling59: 520–528. https://doi.org/10.1016/j.econmod.2016.07.020.
63.
YaoYaoDongKouShuaiShaoXiaoyuLiWenxiWangZhangChentao (2018). “Can Urbanization Process and Carbon Emission Abatement be Harmonious? New Evidence from China.” Environmental Impact Assessment Review71: 70–83. https://doi.org/10.1016/j.eiar.2018.04.005.
64.
YoungAlwyn (2000). “The Razor’s Edge: Distortions and Incremental Reform in the People’s Republic of China.” The Quarterly Journal of Economics115(4): 1091–1135. https://doi.org/10.1162/003355300555024.
65.
ZhangYanfangRuiNieRuyiShiZhangMing (2018). “Measuring the Capacity Utilization of the Coal Sector and Its Decoupling with Economic Growth in China’s Supply-Side Reform.” Resources, Conservation and Recycling129: 314–325. https://doi.org/10.1016/j.resconrec.2016.09.022.
66.
ZhangChuanguoZhouXiangxue (2016). “Does Foreign Direct Investment Lead to Lower CO2 Emissions? Evidence from A Regional Analysis in China.” Renewable and Sustainable Energy Reviews58: 943–951. https://doi.org/10.1016/j.rser.2015.12.226.
67.
ZhangZhongXiang (2010). “China in the Transition to A Low-Carbon Economy.” Energy Policy38(11): 6638–6653. https://doi.org/10.1016/j.enpol.2010.06.034.
68.
ZhangZhongXiang (2014). “Programs, Prices and Policies Towards Energy Conservation and Environmental Quality in China.” In: ManagiShunsuke (ed), Handbook of Environmental Economics in Asia, Routledge, London and New York: 532–551. https://doi.org/10.2139/ssrn.2462030.
69.
ZhangZhongxiang (2015). “Carbon Emissions Trading in China: The Evolution from Pilots to A Nationwide Scheme.” Climate Policy15(sup1): S104–S126. https://doi.org/10.1080/14693062.2015.1096231.
70.
ZhangZhongXiang (2017). “Are China’s Climate Commitments in A Post-Paris Agreement Sufficiently Ambitious?” Wiley Interdisciplinary Reviews: Climate Change8(2): e443. https://doi.org/10.1002/wcc.443.
71.
ZhouXiaoyanZhangJieLiJunpeng (2013). “Industrial Structural Transformation and Carbon Dioxide Emissions in China.” Energy policy57: 43–51. https://doi.org/10.1016/j.enpol.2012.07.017.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
