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Gradual reforms and the emergence of energy market in China: Evidence from tests for convergence of energy prices

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  • Ma, Hengyun
  • Oxley, Les
  • Gibson, John

Abstract

This study investigates the emergence of energy markets by testing for convergence of energy prices with a new dataset on energy spot prices in 35 major cities in China. Both descriptive statistics and unit root are employed to test the convergence of energy prices for each of four fuel price series. The whole study period is divided into two sub-periods in order to reconcile the gradual energy reforms. The results show the steady improvement in energy market performance in China, especially during the second sub-period, which suggests that the market appears to be playing an increasing role in determining energy prices. While panel unit root tests show energy markets are integrated in China as a whole, city-by-city univariate unit root tests suggest that there are still many regional energy markets, probably because energy reserves (especially coal) vary widely across regions. Since China's energy economy is gradually moving towards market-oriented mechanisms, the existing literature may become obsolete soon.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 37 (2009)
Issue (Month): 11 (November)
Pages: 4834-4850

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Handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4834-4850

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Web page: http://www.elsevier.com/locate/enpol

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Keywords: China Energy Price convergence;

References

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Citations

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Cited by:
  1. Hengyun Ma & Les Oxley, 2010. "The Emergence and Evolution of Regional Convergence Clusters in China’s Energy Markets," Working Papers in Economics 10/14, University of Canterbury, Department of Economics and Finance.
  2. Chao Li & John Gibson, 2013. "Spatial Price Differences and Inequality in China: Housing Market Evidence," Working Papers in Economics 13/06, University of Waikato, Department of Economics.
  3. Yang, Jun & Wang, Xiaobing & Ma, Hengyun & Bai, Junfei & Jiang, Ye & Yu, Hai, 2014. "Potential usage, vertical value chain and challenge of biomass resource: Evidence from China’s crop residues," Applied Energy, Elsevier, vol. 114(C), pages 717-723.
  4. Chao Li & John Gibson, 2012. "Rising Regional Inequality in China: Fact or Artefact?," Working Papers in Economics 12/09, University of Waikato, Department of Economics.
  5. Herrerias, M.J. & Ordoñez, J., 2012. "New evidence on the role of regional clusters and convergence in China (1952–2008)," China Economic Review, Elsevier, vol. 23(4), pages 1120-1133.
  6. Bilgili, Faik, 2010. "Energy tax harmonization in EU: Time series and panel data evidence," MPRA Paper 24013, University Library of Munich, Germany.

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