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Role of rent-seeking or technological progress in maintaining the monopoly power of energy enterprises: An empirical analysis based on micro-data from China

Author

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  • Du, Weijian
  • Li, Mengjie
  • Wang, Faming

Abstract

This study investigates the monopoly behavior of Chinese energy enterprises by measuring monopoly power, rent-seeking, and technological progress using relevant micro-data. Benchmark analysis shows that monopoly enterprises in China’s energy industry depend on rent-seeking, which exerts significant inhibitory effects on the technological progress of energy enterprises. Robustness analysis and endogeneity analysis support the above conclusions. A sub-sample regression that distinguishes enterprise ownership shows that state-owned enterprises spend heavily on rent-seeking to maintain monopoly power. In addition, influence mechanisms analysis shows that research and development decision-making is the important channel for monopoly power to promote technological progress of energy enterprises in China. Meanwhile, factor distortion is the important channel for monopoly power to increase rent-seeking behavior and inhibit technological progress of energy enterprises in China. Therefore, to achieve efficient and sustainable development in China’s energy industry, the Chinese government should implement differentiated policies for varied types of energy enterprises, optimize the research and development environment, and reduce the distortion of factor market to curb the rent-seeking behavior of energy enterprises and encourage energy enterprises to upgrade technology progress.

Suggested Citation

  • Du, Weijian & Li, Mengjie & Wang, Faming, 2020. "Role of rent-seeking or technological progress in maintaining the monopoly power of energy enterprises: An empirical analysis based on micro-data from China," Energy, Elsevier, vol. 202(C).
    • Handle: RePEc:eee:energy:v:202:y:2020:i:c:s0360544220308707
    DOI: 10.1016/j.energy.2020.117763
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