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Exploring the relationship between urbanization and energy consumption in China using ARDL (autoregressive distributed lag) and FDM (factor decomposition model)

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  • Liu, Yaobin
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    Abstract

    The paper develops a function of energy consumption, population growth, economic growth and urbanization process, and provides fresh empirical evidences for urbanization and energy consumption for China over the period 1978–2008 through the use of ARDL testing approach and factor decomposition model. The results of the bounds test show that there is a stable long run relationship amongst total energy consumption, population, GDP (Gross domestic product) and urbanization level when total energy consumption is the dependent variable in China. The results of the causality test with ECM (error correction model) specification, the short run and long run dynamics of the interested variables are tested, indicating that there exists only a unidirectional Granger causality running from urbanization to total energy consumption both in the long run and in the short run. At present, the contribution share which urbanization drags the energy consumption is smaller than that in the past, and the intensity holds a downward trend. Therefore, together with enhancing energy efficiency, accelerating the urbanization process that can cut reliance on resource and energy dependent industries is a fundamental strategy to solve the sustainable development dilemma between energy consumption and urbanization.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy.

    Volume (Year): 34 (2009)
    Issue (Month): 11 ()
    Pages: 1846-1854

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    Handle: RePEc:eee:energy:v:34:y:2009:i:11:p:1846-1854

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    Web page: http://www.journals.elsevier.com/energy

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    Keywords: Energy consumption; Urbanization; ARDL testing approach; Granger causality; Factor decomposition model;

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    Cited by:
    1. Salim, Ruhul A. & Shafiei, Sahar, 2014. "Urbanization and renewable and non-renewable energy consumption in OECD countries: An empirical analysis," Economic Modelling, Elsevier, vol. 38(C), pages 581-591.
    2. Lin, Boqiang & Ouyang, Xiaoling, 2014. "Electricity demand and conservation potential in the Chinese nonmetallic mineral products industry," Energy Policy, Elsevier, vol. 68(C), pages 243-253.
    3. Liu, Yaobin, 2014. "Is the natural resource production a blessing or curse for China's urbanization? Evidence from a space–time panel data model," Economic Modelling, Elsevier, vol. 38(C), pages 404-416.
    4. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Y.M. & Sab, Che Normee Binti Che, 2013. "Exploring the relationship between urbanization, energy consumption, and CO2 emission in MENA countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 107-112.
    5. Hualin Xie & Guiying Liu & Qu Liu & Peng Wang, 2014. "Analysis of Spatial Disparities and Driving Factors of Energy Consumption Change in China Based on Spatial Statistics," Sustainability, MDPI, Open Access Journal, vol. 6(4), pages 2264-2280, April.
    6. Khayyat, Nabaz T. & Lee, Jongsu & Lee, Jeong-Dong, 2014. "How ICT Investment Influences Energy Demand in South Korea and Japan?," MPRA Paper 55454, University Library of Munich, Germany.
    7. Wang, Qiang, 2014. "Effects of urbanisation on energy consumption in China," Energy Policy, Elsevier, vol. 65(C), pages 332-339.
    8. Solarin, Sakiru Adebola & Shahbaz, Muhammad, 2013. "Trivariate causality between economic growth, urbanisation and electricity consumption in Angola: Cointegration and causality analysis," Energy Policy, Elsevier, vol. 60(C), pages 876-884.
    9. Suganthi, L. & Samuel, Anand A., 2012. "Energy models for demand forecasting—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1223-1240.
    10. Robert J R Elliott & Puyang Sun & Tong Zhu, 2014. "Urbanization and Energy Intensity: A Province-level Study for China," Discussion Papers 14-05, Department of Economics, University of Birmingham.
    11. WenShwo Fang & Stephen M. Miller & Chih-Chuan Yeh, 2012. "The effect of ECSOs on energy use," Working papers 2012-13, University of Connecticut, Department of Economics.
    12. Khayyat, Nabaz T. & Heshmati, Almas, 2014. "Production Risk, Energy Use Efficiency and Productivity of Korean Industries," IZA Discussion Papers 8081, Institute for the Study of Labor (IZA).
    13. Zhaohua Wang & Bin Zhang & Jianhua Yin, 2012. "Determinants of the increased CO 2 emission and adaption strategy in Chinese energy-intensive industry," Natural Hazards, International Society for the Prevention and Mitigation of Natural Hazards, vol. 62(1), pages 17-30, May.

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