The important of eliminating energy market distortions: The perspective of industrial green productivity

Abstract

The elimination of energy market distortions (EMDs) is a key objective of energy marketization reform and plays a crucial role in advancing green industrial development. This study, based on the provincial panel data from 2008 to 2018 in China, first measured the EMDs from the perspective of competition and non-competition distortions, and then investigated the effect and mechanism of EMDs on industrial green total factor productivity (GTFP). The results indicate a declining trend in EMDs from 2008 to 2018, with a hierarchical distribution from high to low across the western, central, and eastern regions. Particularly, competitive distortions of EMDs inhibit industrial GTFP by negatively affecting green technological innovation. Moreover, the inhibitory effect is more pronounced in the eastern region. Additionally, the inhibitory effect amplifies as local governments face increasing pressures related to economic growth and fiscal demands.