Market Integration,industrial Agglomeration And Energy Efficiency

The improvement of energy efficiency(EE)is the key to China's sustainable development,energy saving and emission reduction.Previous studies mostly interpret the driving factors of energy efficiency on economic perspective.However,China is in the progress of economic transition and political system reforms,it will be lack of persuasion if we ignore the political background that economic system relies on.In the 13 th Five-Year Plan,China has proposed to reinforce the decisive role of market in resource allocation.In this context,market integration has become the key in this turn of reform.In this paper,we incorporate market integration(MI)into the analysis of influencing factors in energy efficiency.Based on new economic geography,we explore the role of industrial agglomeration(IA)in the relationship between MI and EE.As for the method,we use stochastic frontier analysis based on Kumbhakar et al.(2014)to measure EE and its driving factors,and further divide EE into the transient efficiency and persistent efficiency.We also use panel mediating effect model to analyze the role of IA.Results show that:(1)MI plays an important moderated effect in the impacts of IA on EE.A high level of IA would impede the improvement of EE.An increase of MI would reduce the negative effects of IA on EE.The interaction between MI and IA will affect the transient EE in the short term,while in the long term this interaction impacts on the persistent EE.(2)IA plays a mediating role in the impacts of MI on EE,where there are partial mediating effects.MI can not only directly benefit EE,but also indirectly enhance EE through IA.More positive impacts come from the direct effects while the indirect effects from specialization is harmful for EE improvement,and the indirect influences from diversity is beneficial for EE enhancement.(3)The inflection point of specialized IA has appeared,and the further increase of MI would incur a lower level in specialized IA.The rapid growth period of specialized IA has gone through,the enhancement of MI can bring diffusion effects towards specialized IA.The diversified IA is still in the period of rapid growth,and MI is beneficial for the improvement of diversity in IA.Finally,we propose some policy implications for the issues of market segmentation,convergence of industrial structure and EE improvement.