Title: The impact of international oil prices on petroleum industry concentration in China: an analysis based on convergence and cointegration

Authors: Shuangying Wang; Qunwei Wang; Chuanxian Han; Peifeng Zhu; Wenchao Zuo

Addresses: School of Management, Qufu Normal University, 80 Yantai Street, Rizhao, Shandong 276826, China ' School of Business, Soochow University, 1 Shizhi Street, Suzhou, Jiangsu 215000, China ' School of Economic and Management, Beihang University, 37 Xueyuan Street, Beijing 100191, China ' School of Business and Management, Nanjing University of Chinese Medicine, 138 Xianlin Street, Nanjing 210023, China ' School of Management, Qufu Normal University, 80 Yantai Street, Rizhao, Shandong 276826, China

Abstract: Industry competition analysis is an important aspect of the study of competitive advantage and competition strategy. Convergence analysis is an effective approach to describing industry competition dynamics and was employed in the current study to investigate the influence of oil prices on the concentration of the petroleum industry. It was found that industry concentrations in this context had no significant σ-convergence and absolute β-convergence. By introducing international oil prices as the influence index, this research found that petrochemical industry concentration had significant β-convergence, while the international oil price increases made the trends of the convergence diminish. Through co-integration analysis, it was also found that, over the long-term, compared with petroleum processing and the chemical fibre industry, the competition environment of the plastic products industry has gradually improved; however, the rise in international oil prices is likely to reduce the bargaining power of the plastic products industry.

Keywords: industry competition; industry concentration ratio; convergence tests; cointegration; oil prices; oil industry; petroleum industry; petroleum prices; China; petrochemical industry; petroleum processing; chemical fibres; plastic products.

DOI: 10.1504/IJGEI.2015.069480

International Journal of Global Energy Issues, 2015 Vol.38 No.1/2/3, pp.69 - 81

Received: 23 Jun 2014
Accepted: 27 Sep 2014

Published online: 18 May 2015 *

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