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The Impact of Electricity Grid Development on Economic Growth and Energy Consumption in Anhui Province: A Seemingly Unrelated Regression-Based Analysis

Author

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  • Xiaomin Shi

    (Economic Research Institute, State Grid Anhui Electric Power Co., Ltd., Hefei 230022, China)

  • Xiang Gao

    (Economic Research Institute, State Grid Anhui Electric Power Co., Ltd., Hefei 230022, China)

  • Rong Li

    (Economic Research Institute, State Grid Anhui Electric Power Co., Ltd., Hefei 230022, China)

  • Ke Hou

    (School of Economics, Hefei University of Technology, Hefei 230601, China)

  • Yang Song

    (School of Economics, Hefei University of Technology, Hefei 230601, China)

  • Zhongjiang Lu

    (School of Economics, Hefei University of Technology, Hefei 230601, China)

Abstract

Endogeneity is an important issue that needs to be addressed in research. By integrating infrastructure into the input–output system based on a profit function framework, this paper investigates the impact of electricity infrastructure on economic development and energy consumption. Using city-level data from Anhui Province spanning 2012 to 2022 and applying seemingly unrelated regression techniques for parameter estimation, this study finds that an increase in grid density leads to a reduction in energy consumption. While the short-term effect of increased grid density may cause a decline in output, a positive long-term effect on output is observed. This study concludes that the advantages of robust power infrastructure in lowering energy intensity manifest only over an extended time horizon. Based on our findings, we provide relevant recommendations that can be applied to other regions as well.

Suggested Citation

  • Xiaomin Shi & Xiang Gao & Rong Li & Ke Hou & Yang Song & Zhongjiang Lu, 2025. "The Impact of Electricity Grid Development on Economic Growth and Energy Consumption in Anhui Province: A Seemingly Unrelated Regression-Based Analysis," Sustainability, MDPI, vol. 17(7), pages 1-20, April.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:7:p:3193-:d:1627664
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