Market access and firms’ energy intensity: Evidence from China’s highway construction

Reducing energy intensity (EI) is crucial to sustainable development. Recently, with the continuous improvement of transportation infrastructure, China has experienced a rapid decline in EI. Based on this, we utilize micro firm data from 2007 to 2016 to empirically examine the relationship between market access and firms’ EI. Our results indicate that the improvement of market access significantly reduces firms’ EI, and this conclusion holds after a series of robustness checks. The mechanism analysis suggest that the enhancement of market access can reduce firms’ EI through avenues such as optimizing energy structure, expanding firm production scale, and optimizing resource allocation. The results of heterogeneity analysis reveal that in the manufacturing industry, industries with high road dependence, and in the eastern and central regions, the impact of market access on firms’ EI is more pronounced.