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Government expenditure and energy intensity in China

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  • Yuxiang, Karl
  • Chen, Zhongchang
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    Abstract

    The recent economic stimulus package of China has raised growing concern about its potential impact on energy demand and efficiency. To what extent does such expansion of government expenditure influence energy intensity? This question has not been well answered by the previous research. Using provincial panel data, this paper provides some evidence of a link between government expenditure and energy intensity in China. The empirical results demonstrate that the expansion of government expenditure since Asian financial crisis has exerted a significant influence on energy intensity. An increase in government expenditure in China leads to an increase in energy intensity. Further analysis compares such relationships in different economic situations. The comparison shows that such positive effect of government expenditure remains significant after the alteration in economic situation. Therefore, the results suggest introducing some measures to consolidate China's existing gains in energy efficiency. The analysis also explains why the downward trend in energy intensity is reversed in China since 2002.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 38 (2010)
    Issue (Month): 2 (February)
    Pages: 691-694

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    Handle: RePEc:eee:enepol:v:38:y:2010:i:2:p:691-694

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

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    Keywords: Energy demand Energy intensity China;

    References

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    Cited by:
    1. Zhang, Haiyan & Lahr, Michael L., 2014. "China's energy consumption change from 1987 to 2007: A multi-regional structural decomposition analysis," Energy Policy, Elsevier, vol. 67(C), pages 682-693.
    2. Huimin, Liu, 2013. "The impact of human behavior on ecological threshold: Positive or negative?—Grey relational analysis of ecological footprint, energy consumption and environmental protection," Energy Policy, Elsevier, vol. 56(C), pages 711-719.
    3. Ming, Zeng & Song, Xue & Lingyun, Li & Yuejin, Wang & Yang, Wei & Ying, Li, 2013. "China's large-scale power shortages of 2004 and 2011 after the electricity market reforms of 2002: Explanations and differences," Energy Policy, Elsevier, vol. 61(C), pages 610-618.
    4. Huang, Yuanxi & Todd, Daniel, 2010. "The energy implications of Chinese regional disparities," Energy Policy, Elsevier, vol. 38(11), pages 7531-7538, November.
    5. Yuxiang, Karl & Chen, Zhongchang, 2011. "Resource abundance and financial development: Evidence from China," Resources Policy, Elsevier, vol. 36(1), pages 72-79, March.

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