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Government expenditure and energy intensity in China

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  • Yuxiang, Karl
  • Chen, Zhongchang

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.

Suggested Citation

  • Yuxiang, Karl & Chen, Zhongchang, 2010. "Government expenditure and energy intensity in China," Energy Policy, Elsevier, vol. 38(2), pages 691-694, February.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:2:p:691-694
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    Cited by:

    1. Huang, Yuanxi & Todd, Daniel, 2010. "The energy implications of Chinese regional disparities," Energy Policy, Elsevier, vol. 38(11), pages 7531-7538, November.
    2. Kahrl, Fredrich & Roland-Holst, David & Zilberman, David, 2013. "Past as Prologue? Understanding energy use in post-2002 China," Energy Economics, Elsevier, vol. 36(C), pages 759-771.
    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. Tafadzwa Ruzive & Thando Mkhombo & Simba Mhaka & Nomahlubi Mavikela & Andrew Phiri, 2017. "Elecricity intensity and unemployment in South Africa: A quantile regression analysis," Working Papers 1711, Department of Economics, Nelson Mandela University, revised Sep 2017.
    5. Lei Jiang & Minhe Ji, 2016. "China’s Energy Intensity, Determinants and Spatial Effects," Sustainability, MDPI, Open Access Journal, vol. 8(6), pages 1-15, June.
    6. 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.
    7. Yan, Huijie, 2015. "Provincial energy intensity in China: The role of urbanization," Energy Policy, Elsevier, vol. 86(C), pages 635-650.
    8. Yang, Guangfei & Li, Wenli & Wang, Jianliang & Zhang, Dongqing, 2016. "A comparative study on the influential factors of China's provincial energy intensity," Energy Policy, Elsevier, vol. 88(C), pages 74-85.
    9. Kangjuan Lv & Anyu Yu & Yiwen Bian, 2017. "Regional energy efficiency and its determinants in China during 2001–2010: a slacks-based measure and spatial econometric analysis," Journal of Productivity Analysis, Springer, vol. 47(1), pages 65-81, February.
    10. Wu, Yanrui, 2012. "Energy intensity and its determinants in China's regional economies," Energy Policy, Elsevier, vol. 41(C), pages 703-711.
    11. Zhao, Xiaoli & Lyon, Thomas P. & Song, Cui, 2012. "Lurching towards markets for power: China’s electricity policy 1985–2007," Applied Energy, Elsevier, vol. 94(C), pages 148-155.
    12. Yu, Huayi, 2012. "The influential factors of China's regional energy intensity and its spatial linkages: 1988–2007," Energy Policy, Elsevier, vol. 45(C), pages 583-593.
    13. Dayong Zhang and David C. Broadstock, 2016. "Club Convergence in the Energy Intensity of China," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    14. Yuxiang, Karl & Chen, Zhongchang, 2011. "Resource abundance and financial development: Evidence from China," Resources Policy, Elsevier, vol. 36(1), pages 72-79, March.
    15. Jiang, Lei & Folmer, Henk & Ji, Minhe, 2014. "The drivers of energy intensity in China: A spatial panel data approach," China Economic Review, Elsevier, vol. 31(C), pages 351-360.
    16. 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.
    17. Halkos, George E. & Paizanos, Epameinondas Α., 2016. "The effects of fiscal policy on CO2 emissions: Evidence from the U.S.A," Energy Policy, Elsevier, vol. 88(C), pages 317-328.
    18. Ma, Ben, 2015. "Does urbanization affect energy intensities across provinces in China?Long-run elasticities estimation using dynamic panels with heterogeneous slopes," Energy Economics, Elsevier, vol. 49(C), pages 390-401.
    19. Zhang, Dayong & Cao, Hong & Wei, Yi-Ming, 2016. "Identifying the determinants of energy intensity in China: A Bayesian averaging approach," Applied Energy, Elsevier, vol. 168(C), pages 672-682.

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