Allies or rivals? Spatial price competition in the Chinese retail gasoline market of inner Mongolia. Issue 2 (3rd April 2023)

• Record Type: Journal Article
• Authors: Yu, Yihua; Cui, Jian; Huang, Chuwen; Yang, Hanfang
• Is Part Of: Spatial economic analysis. Volume 18:Issue 2(2023)
• Page Start: 197
• Page End: 215
• Publication Date: 2023-04-03
• Subjects: price competition -- spatial models -- retail gasoline -- China; C23 -- L13 -- L81 -- R32; Space in economics -- Periodicals; Economic geography -- Periodicals; Space in economics -- Econometric models -- Periodicals; Urbanization -- Periodicals; Espace (Économie politique) -- Périodiques; Économétrie -- Périodiques; Géographie économique -- Périodiques; Économie industrielle -- Périodiques; Économie du travail -- Périodiques; Économie urbaine -- Périodiques; Politique économique -- Périodiques; Relations économiques internationales -- Périodiques; 330.9
• DOI: 10.1080/17421772.2022.2118361
• Languages: English
• ISSNs: 1742-1772

Abstract

ABSTRACT: This study examines the pricing behaviour in the gasoline market using station-level pricing data from Inner Mongolia, China. The spatial econometric findings confirm that: (1) there is a significant spatial dependence among gas stations; (2) the two state-owned oil giants, PetroChina and Sinopec, receive a positive pricing effect from their brands compared with other stations; (3) there is no significant evidence of price competition among PetroChina stations, and some evidence of competition among Sinopec stations, and more intense competition among other stations; and (4) 'stand-alone' (no stations nearby) stations have a price premium, but the premium is limited by the price regulation. Our results show the heterogeneity in pricing behaviour between stations, implying the need for differentiated policies to ensure orderly competition in the retail gasoline market.