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Marketization of the electricity industry and investment efficiency of electricity companies: Evidence based on the revision of the Electricity Law

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  • Huang, Shangyuan
  • Zhou, Zhiyuan

Abstract

As a key pathway for China’s energy transition, the legalization of power market reform has a profound impact on the resource allocation efficiency of microeconomic entities. Utilizing data from 103 listed power companies in the Chinese A-share market from 2013 to 2023, this paper employs the difference-in-differences method to empirically test the impact of the 2018 revision of the Electricity Law on the investment efficiency of power companies and the mechanisms underlying this impact. The results indicate that the revision of the Electricity Law significantly improved the investment efficiency of power companies. Mechanism analysis reveals that the revision of the Electricity Law improved investment efficiency by enhancing investment expectations and promoting innovation and transformation. Heterogeneity tests indicate that non-state-owned enterprises experienced a more pronounced improvement in investment efficiency than did their state-owned counterparts.

Suggested Citation

  • Huang, Shangyuan & Zhou, Zhiyuan, 2025. "Marketization of the electricity industry and investment efficiency of electricity companies: Evidence based on the revision of the Electricity Law," Finance Research Letters, Elsevier, vol. 86(PE).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pe:s1544612325019993
    DOI: 10.1016/j.frl.2025.108745
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    References listed on IDEAS

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