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Retesting the causality between energy consumption and GDP in China: Evidence from sectoral and regional analyses using dynamic panel data

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  • Zhang, Chuanguo
  • Xu, Jiao
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    Abstract

    The increasing attention on energy policy needs has provided a renewed stimulus to research the linkages between energy consumption and economic performance in China. This paper examined the causal relationship between energy consumption and economic growth in the regional and sectoral aspects by adopting provincial panel data in China from 1995 to 2008. The results indicate that economic growth causes more energy consumption in China not only at the national level but also at the regional and sectoral levels. Then the Eastern Region and the industrial sector show results quite similar to that of the whole country, in which a bidirectional causality relationship exists between energy consumption and economic growth. The implication for energy policies in China is that the Eastern Region and the industrial sector should play a leading role in the adjustment of energy consumption patterns and the transformation of the economy structure. Energy prices have limited effects on energy consumption but do have effects on economic growth because the energy price mechanism is more government-oriented than market-oriented in China.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 34 (2012)
    Issue (Month): 6 ()
    Pages: 1782-1789

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    Handle: RePEc:eee:eneeco:v:34:y:2012:i:6:p:1782-1789

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    Web page: http://www.elsevier.com/locate/eneco

    Related research

    Keywords: Energy consumption; Economic growth; Granger causality;

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    Cited by:
    1. Wen, Xiaoqian & Guo, Yanfeng & Wei, Yu & Huang, Dengshi, 2014. "How do the stock prices of new energy and fossil fuel companies correlate? Evidence from China," Energy Economics, Elsevier, vol. 41(C), pages 63-75.
    2. Herrerias, M.J. & Joyeux, R. & Girardin, E., 2013. "Short- and long-run causality between energy consumption and economic growth: Evidence across regions in China," Applied Energy, Elsevier, vol. 112(C), pages 1483-1492.
    3. Saboori, Behnaz & Sulaiman, Jamalludin, 2013. "Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia," Energy Policy, Elsevier, vol. 60(C), pages 892-905.
    4. Paresh Narayan & Russell Smyth, 2014. "Applied Econometrics and a Decade of Energy Economics Research," Development Research Unit Working Paper Series 21-14, Monash University, Department of Economics.
    5. Shahbaz, Muhammad & Khan, Saleheen & Tahir, Mohammad Iqbal, 2013. "The dynamic links between energy consumption, economic growth, financial development and trade in China: Fresh evidence from multivariate framework analysis," Energy Economics, Elsevier, vol. 40(C), pages 8-21.
    6. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Ym & Sab, Che Normee Binti Che, 2013. "Examining the bi-directional long run relationship between renewable energy consumption and GDP growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 209-222.
    7. Heidari, Hassan & Katircioglu, Salih Turan & Saeidpour, Lesyan, 2013. "Natural gas consumption and economic growth: Are we ready to natural gas price liberalization in Iran?," Energy Policy, Elsevier, vol. 63(C), pages 638-645.
    8. Lin, Boqiang & Xie, Chunping, 2013. "Estimation on oil demand and oil saving potential of China's road transport sector," Energy Policy, Elsevier, vol. 61(C), pages 472-482.

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