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The Emergence and Evolution of Regional Convergence Clusters in China’s Energy Markets

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Abstract

Employing the new regression tests for Convergence, Club Convergence and Clustering proposed by Phillips and Sul (2007), this paper models and analyzes the behavior 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. It is found that: 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 growing in membership; vi) 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 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.

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File URL: http://www.econ.canterbury.ac.nz/RePEc/cbt/econwp/1014.pdf
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Bibliographic Info

Paper provided by University of Canterbury, Department of Economics and Finance in its series Working Papers in Economics with number 10/14.

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Length: 33 pages
Date of creation: 20 Apr 2010
Date of revision:
Handle: RePEc:cbt:econwp:10/14

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Keywords: China; Energy market; Convergence cluster;

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Cited by:
  1. Akhmedjonov, Alisher & Lau, Chi Keung, 2012. "Do energy prices converge across Russian regions?," Economic Modelling, Elsevier, vol. 29(5), pages 1623-1631.

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