A combination of high resolution x-ray absorption and x-ray emission spectroscopy is used to investigate electronic properties of LiCoO2 nanoparticles with various sizes down to 8 nm. We find that the nanostructuring has direct influence on the electronic structure of the title system, similar to the effect of delithiation. In particular, an abrupt reduction (increase) of the intersite (intrasite) 4p-3d hybridization is observed for nanoparticles with size smaller than 15 nm. Since the electrochemical properties are known to degrade in nanoparticles below the critical size of 15 nm, the results indicate a direct relationship between the intersite-intrasite correlations and the cathode efficiency, limiting the use of LiCoO2 nanoparticles.