Marketisation and rural energy poverty: Evidence from provincial panel data in China

Abstract

Under the advancement of market-oriented reforms, China's economy has achieved rapid growth, but rural energy poverty has also become a topic widely discussed in academic circles in recent years. This paper examines whether marketization can effectively reduce rural energy poverty in China. To this end, we build a nonlinear analysis framework, including the quantile panel model and panel threshold model, to investigate the impact mechanism of marketization on rural energy poverty using China's provincial data. The results suggest the following. (i) The effects of marketization on rural energy poverty are heterogeneous across China's provinces based on energy poverty. (ii) There is an inverted U-shaped relationship between marketization and rural energy poverty for provinces with different energy poverty levels. The impact of marketization on rural energy poverty changes from promotion to suppression when market-oriented reform is advanced to a certain level. (iii) There is a new threshold effect of marketization on energy poverty in the right part of the inverted U-curve. This indicates that marketization can reduce energy poverty more in provinces with “higher marketization” than in provinces with “lower marketization”.