IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i21p13778-d951750.html
   My bibliography  Save this article

The Impact of Market Integration on Renewable Energy Technology Innovation: Evidence from China

Author

Listed:
  • Xiaohong Liu

    (Business College, Nanjing Xiaozhuang University, Nanjing 211171, China)

  • Meiwen Zhang

    (Business College, Nanjing Xiaozhuang University, Nanjing 211171, China)

Abstract

China is vigorously building a unified domestic market, with priority given to regional market integration while maintaining a national unified market. Limited research has been conducted on whether market integration affects renewable energy technology innovation (RETI). This paper empirically studies this topic based on panel data of 30 Chinese provinces from 2004 to 2020 using FMOLS (Fully Modified Ordinary Least Squares), DOLS (Dynamic Least Squares method), and FGLS (Feasible Generalized Least Squares). Research results have been verified by robustness tests. The main conclusions are as follows: (1) Market integration has an important positive impact on RETI, namely, boosting it. This conclusion remains robust when different indicators of innovation and market segmentation are included. (2) The regional impacts of market integration on RETI are heterogeneous, being the greatest in east China, followed by west China and central China. (3) Market integration affects RETI through energy structure and technological innovation. It can optimize energy structure, improve technological innovation, and thus enhance RETI. Based on the above conclusions, in order to improve RETI in China and expand its contribution to carbon neutrality and carbon peaking, China needs to strengthen the construction of a national unified market and implement differentiated market integration policies in east, central, and west China. Furthermore, it is necessary to give full play to the role of energy structure and technological innovation in market integration by optimizing energy structure and improving technological innovation.

Suggested Citation

  • Xiaohong Liu & Meiwen Zhang, 2022. "The Impact of Market Integration on Renewable Energy Technology Innovation: Evidence from China," Sustainability, MDPI, vol. 14(21), pages 1-14, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:13778-:d:951750
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/21/13778/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/21/13778/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Verdolini, Elena & Galeotti, Marzio, 2011. "At home and abroad: An empirical analysis of innovation and diffusion in energy technologies," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 119-134, March.
    2. David C. Parsley & Shang-Jin Wei, 2001. "Limiting Currency Volatility to Stimulate Goods Market Integration: A Price Based Approach," NBER Working Papers 8468, National Bureau of Economic Research, Inc.
    3. Lin, Boqiang & Chen, Yufang, 2019. "Does electricity price matter for innovation in renewable energy technologies in China?," Energy Economics, Elsevier, vol. 78(C), pages 259-266.
    4. Epifani, Paolo & Gancia, Gino, 2011. "Trade, markup heterogeneity and misallocations," Journal of International Economics, Elsevier, vol. 83(1), pages 1-13, January.
    5. Guta, Dawit Diriba, 2020. "Determinants of household use of energy-efficient and renewable energy technologies in rural Ethiopia," Technology in Society, Elsevier, vol. 61(C).
    6. Frank, Alejandro Germán & Gerstlberger, Wolfgang & Paslauski, Carolline Amaral & Lerman, Laura Visintainer & Ayala, Néstor Fabián, 2018. "The contribution of innovation policy criteria to the development of local renewable energy systems," Energy Policy, Elsevier, vol. 115(C), pages 353-365.
    7. Wadim Strielkowski & Anna Sherstobitova & Patrik Rovny & Tatiana Evteeva, 2021. "Increasing Energy Efficiency and Modernization of Energy Systems in Russia: A Review," Energies, MDPI, vol. 14(11), pages 1-19, May.
    8. Muhammad Raza & Ali Saleh Alshebami & Amena Sibghatullah, 2020. "Factors Influencing Renewable Energy Technological Innovation in Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 573-579.
    9. Hoekman, Bernard & Nicita, Alessandro, 2011. "Trade Policy, Trade Costs, and Developing Country Trade," World Development, Elsevier, vol. 39(12), pages 2069-2079.
    10. Federico, Giovanni, 2007. "Market integration and market efficiency: The case of 19th century Italy," Explorations in Economic History, Elsevier, vol. 44(2), pages 293-316, April.
    11. Wang, Qiang & Li, Rongrong, 2016. "Drivers for energy consumption: A comparative analysis of China and India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 954-962.
    12. Adami, Vivian Sebben & Antunes Júnior, José Antônio Valle & Sellitto, Miguel Afonso, 2017. "Regional industrial policy in the wind energy sector: The case of the State of Rio Grande do Sul, Brazil," Energy Policy, Elsevier, vol. 111(C), pages 18-27.
    13. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    14. He, Weijun & Wang, Bo & Danish, & Wang, Zhaohua, 2018. "Will regional economic integration influence carbon dioxide marginal abatement costs? Evidence from Chinese panel data," Energy Economics, Elsevier, vol. 74(C), pages 263-274.
    15. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 353-377.
    16. Poncet, Sandra, 2003. "Measuring Chinese domestic and international integration," China Economic Review, Elsevier, vol. 14(1), pages 1-21.
    17. Laura Bottazzi & Giovanni Peri, 2007. "The International Dynamics of R&D and Innovation in the Long Run and in The Short Run," Economic Journal, Royal Economic Society, vol. 117(518), pages 486-511, March.
    18. Ge, Tao & Cai, Xuesen & Song, Xiaowei, 2022. "How does renewable energy technology innovation affect the upgrading of industrial structure? The moderating effect of green finance," Renewable Energy, Elsevier, vol. 197(C), pages 1106-1114.
    19. Wang, Wei & Xiao, Weiwei & Bai, Caiquan, 2022. "Can renewable energy technology innovation alleviate energy poverty? Perspective from the marketization level," Technology in Society, Elsevier, vol. 68(C).
    20. Li, Jianglong & Lin, Boqiang, 2017. "Does energy and CO2 emissions performance of China benefit from regional integration?," Energy Policy, Elsevier, vol. 101(C), pages 366-378.
    21. Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Maham Furqan, 2020. "Oil sector and CO2 emissions in Saudi Arabia: asymmetry analysis," Palgrave Communications, Palgrave Macmillan, vol. 6(1), pages 1-10, December.
    22. Peter Pedroni, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 653-670, November.
    23. Elissaios Papyrakis, 2004. "Natural Resources, Innovation, and Growth," Working Papers 2004.129, Fondazione Eni Enrico Mattei.
    24. Li, Songran & Shao, Qinglong, 2021. "Exploring the determinants of renewable energy innovation considering the institutional factors: A negative binomial analysis," Technology in Society, Elsevier, vol. 67(C).
    25. Hille, Erik & Althammer, Wilhelm & Diederich, Henning, 2020. "Environmental regulation and innovation in renewable energy technologies: Does the policy instrument matter?," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    26. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    27. Jing‐Lin Duanmu & Maoliang Bu & Russell Pittman, 2018. "Does market competition dampen environmental performance? Evidence from China," Strategic Management Journal, Wiley Blackwell, vol. 39(11), pages 3006-3030, November.
    28. repec:bla:obuest:v:61:y:1999:i:0:p:653-70 is not listed on IDEAS
    29. Cao, Dongqin & Peng, Can & Yang, Guanglei & Zhang, Wei, 2022. "How does the pressure of political promotion affect renewable energy technological innovation? Evidence from 30 Chinese provinces," Energy, Elsevier, vol. 254(PA).
    30. Yan, Zheming & Du, Keru & Yang, Zhiming & Deng, Min, 2017. "Convergence or divergence? Understanding the global development trend of low-carbon technologies," Energy Policy, Elsevier, vol. 109(C), pages 499-509.
    31. Ke, Shanzi, 2015. "Domestic Market Integration and Regional Economic Growth—China’s Recent Experience from 1995–2011," World Development, Elsevier, vol. 66(C), pages 588-597.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhumuza Ezra Rubanda & Livingstone Senyonga & Mohammed Ngoma & Muyiwa S. Adaramola, 2022. "Electricity Trading in Energy Market Integration: A Theoretical Review," Energies, MDPI, vol. 16(1), pages 1-31, December.
    2. Rubanda, Muhumuza Ezra & Senyonga, Livingstone & Ngoma, Mohammed & Adaramola, Muyiwa S., 2023. "Energy market integration: Harmonizing tariff recourse policies in East Africa," Utilities Policy, Elsevier, vol. 84(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nepal, Rabindra & Liu, Yang & Wang, Jianda & Dong, Kangyin, 2024. "How does green finance promote renewable energy technology innovation? A quasi-natural experiment perspective," Energy Economics, Elsevier, vol. 134(C).
    2. Cheng, Yuanyuan & Yao, Xin, 2021. "Carbon intensity reduction assessment of renewable energy technology innovation in China: A panel data model with cross-section dependence and slope heterogeneity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    3. Lee, Chien-Chiang & He, Zhi-Wen & Xiao, Fu, 2022. "How does information and communication technology affect renewable energy technology innovation? International evidence," Renewable Energy, Elsevier, vol. 200(C), pages 546-557.
    4. Du, Kerui & Cheng, Yuanyuan & Yao, Xin, 2021. "Environmental regulation, green technology innovation, and industrial structure upgrading: The road to the green transformation of Chinese cities," Energy Economics, Elsevier, vol. 98(C).
    5. Francisco García-Lillo & Eduardo Sánchez-García & Bartolomé Marco-Lajara & Pedro Seva-Larrosa, 2023. "Renewable Energies and Sustainable Development: A Bibliometric Overview," Energies, MDPI, vol. 16(3), pages 1-22, January.
    6. Abdelaziz Boukhelkhal, 2022. "Energy use, economic growth and CO2 emissions in Africa: does the environmental Kuznets curve hypothesis exist? New evidence from heterogeneous panel under cross-sectional dependence," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 13083-13110, November.
    7. Heike Belitz & Florian Mölders, 2016. "International knowledge spillovers through high-tech imports and R&D of foreign-owned firms," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(4), pages 590-613, June.
    8. Ibrahim A. Adekunle & Abayomi T. Onanuga & Ibrahim A. Odusanya, 2021. "Financial Integration and Growth Outcomes in Africa: Experience of the Trade Blocs," Research Africa Network Working Papers 21/052, Research Africa Network (RAN).
    9. Mohamed Khaled Al-Jafari & Hatem Hatef Abdulkadhim Altaee, 2023. "The Role of Labor Productivity in Reducing Carbon Emission Utilizing the Method of Moments Quantile Regression: Evidence from Top 40 Emitter Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 15(3), pages 1-1, March.
    10. Jing Gao & Wen Xu & Lei Zhang, 2021. "Tourism, economic growth, and tourism-induced EKC hypothesis: evidence from the Mediterranean region," Empirical Economics, Springer, vol. 60(3), pages 1507-1529, March.
    11. Apergis, Nicholas & Christou, Christina & Gupta, Rangan, 2017. "Are there Environmental Kuznets Curves for US state-level CO2 emissions?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 551-558.
    12. Tiba, Sofien & Frikha, Mohamed, 2019. "The controversy of the resource curse and the environment in the SDGs background: The African context," Resources Policy, Elsevier, vol. 62(C), pages 437-452.
    13. Theodoros Christoforidis & Constantinos Katrakilidis, 2022. "Does Foreign Direct Investment Matter for Environmental Degradation? Empirical Evidence from Central–Eastern European Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(4), pages 2665-2694, December.
    14. Cao, Dongqin & Peng, Can & Yang, Guanglei, 2022. "The pressure of political promotion and renewable energy technological innovation: A spatial econometric analysis from China," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    15. Usman Mehmood & Muhammad Umar Aslam & Muhammad Adil Javed, 2023. "Associating Economic Growth and Ecological Footprints through Human Capital and Biocapacity in South Asia," World, MDPI, vol. 4(3), pages 1-14, September.
    16. Yang, Guanglei & Zhang, Guoxing & Cao, Dongqin & Zha, Donglan & Gao, Xiulin & Su, Bin, 2024. "China's provincial-level sustainable energy transition requires accelerating renewable energy technological innovation," Energy, Elsevier, vol. 288(C).
    17. Kun Zheng & Hongbing Deng & Kangni Lyu & Shuang Yang & Yu Cao, 2022. "Market Integration, Industrial Structure, and Carbon Emissions: Evidence from China," Energies, MDPI, vol. 15(24), pages 1-22, December.
    18. Apergis, Nicholas, 2016. "Environmental Kuznets curves: New evidence on both panel and country-level CO2 emissions," Energy Economics, Elsevier, vol. 54(C), pages 263-271.
    19. Bano, Sadia & Liu, Lu & Khan, Anwar, 2022. "Dynamic influence of aging, industrial innovations, and ICT on tourism development and renewable energy consumption in BRICS economies," Renewable Energy, Elsevier, vol. 192(C), pages 431-442.
    20. Iheonu O Chimere & Tochukwu Nwachukwu, 2020. "Macroeconomic determinants of household consumption in selected West African countries," Economics Bulletin, AccessEcon, vol. 40(2), pages 1596-1606.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:13778-:d:951750. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.