Investigate the impact of market reforms on the improvement of manufacturing energy efficiency under China’s provincial-level data

Abstract

Abstract Government departments are generally regarded as the most effective force in achieving energy conservation and emission reduction, but only relying on the coercive force of the government cannot achieve complete energy conservation. The role of the market is to determine the direction of consumption. Unfortunately, existing research only considers the role of government regulation and ignores the welfare effects of market reforms. Therefore, using China’s provincial-level data, this study investigates the impact of market reform (MR) on energy efficiency (EE). The super epsilon-based measure model was utilized to measure the EE, and panel quantile regression technology was employed to explore the heterogeneity effect of the EE at different quantiles. The empirical results show that: (i) the level of China s manufacturing EE is relatively low, showing a inverted U-shaped trend during the sample period, and there remain distinct provincial differences. (ii) MR significantly improves EE and shows an inverted U-shaped trend. Moreover, this study finds that environmental regulations, energy structure, and financial development have significantly improved EE. To make the results robust, this study uses five MR substitute indicators for robustness test. Finally, the policy in this study implies that the government should focus on MR development and reduce provincial differences.