Market segmentation and urban energy consumption: An analysis of threshold effects from an agglomeration perspective

Mitigating energy consumption is a critical concern for countries globally as they pursue sustainable development goals. Despite the intertwining nature of market segmentation and economic development, their impact on energy consumption has received limited attention. The role of urban agglomeration in this context remains a topic of debate. This study explores the relationship between market segmentation and energy consumption based on the urban agglomeration perspective. Our empirical analysis draws on panel data from 265 cities across China collected over the period from 2004 to 2022. Diverging from prior studies that focus on singular indicators, our approach encompasses urban agglomeration across three dimensions: polycentric, industrial, and population concentrations. The research results show that: (1) Market segmentation is positively associated with urban energy consumption trends consistent across robustness tests; (2) Market segmentation has a significant impact on urban energy consumption, which varies significantly in terms of city scale, location and level. (3) The three urban agglomeration variables exhibit distinct moderating effects on the relationship between market segmentation and energy consumption. These research results provide a theoretical foundation for policy recommendations for energy conservation and market segmentation reduction.