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Do urbanization, income, and trade affect electricity consumption across Chinese provinces?

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  • Gregori, Tullio
  • Tiwari, Aviral Kumar

Abstract

The aim of this paper is to investigate the short- and long-run links among urbanization, output (Gross Domestic Product, GDP), trade openness, and electricity consumption in China, using a rich dataset at the provincial level. The short-run Granger causality analysis discloses a unidirectional causal relationship running from electricity to output and weak feedback effects between trade and urbanization. The long-run Granger causality analysis shows output, urbanization, and trade trigger electricity consumption whereas trade, urbanization, and electricity cause output. The Group Mean and Lambda-Pearson causality tests reveal a large heterogeneity in the long-run effects which suggests there is no “one-size fits all” policy and each region should formulate a differentiated urbanization/growth strategy based on its own characteristics to control electricity utilization.

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  • Gregori, Tullio & Tiwari, Aviral Kumar, 2020. "Do urbanization, income, and trade affect electricity consumption across Chinese provinces?," Energy Economics, Elsevier, vol. 89(C).
  • Handle: RePEc:eee:eneeco:v:89:y:2020:i:c:s0140988320301407
    DOI: 10.1016/j.eneco.2020.104800
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