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Market Segmentation and Energy Efficiency: Evidence from China’s Regional Economies

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  • Liang Nie
  • ZhongXiang Zhang

Abstract

Existing studies have focused on the negative impact of inefficient resource allocation on energy performance in China, but neglected to explore the underlying reason for this phenomenon from the perspective of market segmentation. To fill this research gap, the epsilon-based measure model is used to estimate energy efficiency, and the measurement method of market segmentation is improved in this paper. On the basis of a theoretical hypothesis, we use fractional regression models to conduct empirical research. The results show that market segmentation has a significant negative effect on China’s energy efficiency. Additionally, this inhibitory effect is robust but heterogeneous. The impact mechanism test indicates that energy price distortion, enterprise technology innovation, and industrial agglomeration are three intermediate influence channels. Based on these analyses, we suggest that China should accelerate market-oriented reform and eliminate market segmentation in pursuit of energy-saving and emission-abating goals.

Suggested Citation

  • Liang Nie & ZhongXiang Zhang, 2022. "Market Segmentation and Energy Efficiency: Evidence from China’s Regional Economies," The Energy Journal, , vol. 43(6), pages 217-242, November.
    • Handle: RePEc:sae:enejou:v:43:y:2022:i:6:p:217-242
    DOI: 10.5547/01956574.43.6.lnie
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    References listed on IDEAS

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    2. Pei Yuan & Mingzhen Shao & Chao Ma, 2024. "RETRACTED ARTICLE: Unlocking Economic Unity: The Digital Economy’s Impact on Market Segmentation in China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 16700-16734, December.
    3. He Yu & Tian Jiexin & Chen Zhenzhen & Qin Zhaohui & Mihasina Harinaivo Andrianarimanana, 2025. "Influence of national intellectual property demonstration enterprise policy on urban green innovation: evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(1), pages 1499-1518, January.
    4. Hou, Xinshuo & He, Yan & Liu, Xin & Li, Dongyang & Zhang, Shijie, 2025. "Market segmentation and urban energy consumption: An analysis of threshold effects from an agglomeration perspective," Energy Economics, Elsevier, vol. 147(C).
    5. Lai, Aolin & Du, Qian & Wang, Qunwei, 2024. "One region's gain is another's loss: The impact of market segmentation on renewable energy development in China," Energy Policy, Elsevier, vol. 192(C).
    6. Song, Yan & Liu, Congcong & Zhang, Ming, 2025. "Producer services agglomeration and energy efficiency enhancement: A serial mediation model with digital economy moderation," Energy, Elsevier, vol. 318(C).
    7. He, Ruofan & Wan, Panbing, 2024. "Electricity market integration in China: The role of government officials’ hometown ties," Energy, Elsevier, vol. 303(C).

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