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LAPSE:2019.0202
Published Article
LAPSE:2019.0202
Economic Growth, Electricity Consumption, Labor Force and Capital Input: A More Comprehensive Analysis on North China Using Panel Data
Huiru Zhao, Haoran Zhao, Xiaoyu Han, Zhonghua He, Sen Guo
January 31, 2019
Over the past three decades, China’s economy has witnessed remarkable growth, with an average annual growth rate over 9%. However, China also faces great challenges to balance this spectacular economic growth and continuously increasing energy use like many other economies in the world. With the aim of designing effective energy and environmental policies, policymakers are required to master the relationship between energy consumption and economic growth. Therefore, in the case of North China, a multivariate model employing panel data analysis method based on the Cobb-Douglas production function which introduces electricity consumption as a main factor was established in this paper. The equilibrium relationship and causal relationship between real GDP, electricity consumption, total investment in fixed assets, and the employment were explored using data during the period of 1995⁻2014 for six provinces in North China, including Beijing City, Tianjin City, Hebei Province, Shanxi Province, Shandong Province and Inner Mongolia. The results of panel co-integration tests clearly state that all variables are co-integrated in the long term. Finally, Granger causality tests were used to examine the causal relationship between economic growth, electricity consumption, labor force and capital. From the Granger causality test results, we can draw the conclusions that: (1) There exist bi-directional causal relationships between electricity consumption and real GDP in six provinces except Hebei; and (2) there is a bi-directional relationship between capital input and economic growth and between labor force input and economic growth except Beijing and Hebei. Therefore, the ways to solve the contradiction of economic growth and energy consumption in North China are to reduce fossil energy consumption, develop renewable and sustainable energy sources, improve energy efficiency, and increase the proportion of the third industry, especially the sectors which hold the characteristics of low energy consumption and high value-added.
Keywords
economic growth, electricity consumption, granger causality test, labor force and capital input, panel co-integration test
Suggested Citation
Zhao H, Zhao H, Han X, He Z, Guo S. Economic Growth, Electricity Consumption, Labor Force and Capital Input: A More Comprehensive Analysis on North China Using Panel Data. (2019). LAPSE:2019.0202
Author Affiliations
Zhao H: School of Economics and Management, North China Electric Power University, Beijing 102206, China
Zhao H: School of Economics and Management, North China Electric Power University, Beijing 102206, China
Han X: School of Economics and Management, North China Electric Power University, Beijing 102206, China
He Z: North China Grid Company Limited, Beijing Xuanwu District No. 482 Canton Avenue, Beijing 100053, China
Guo S: School of Economics and Management, North China Electric Power University, Beijing 102206, China
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Journal Name
Energies
Volume
9
Issue
11
Article Number
E891
Year
2016
Publication Date
2016-10-29
Published Version
ISSN
1996-1073
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PII: en9110891, Publication Type: Journal Article
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LAPSE:2019.0202
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doi:10.3390/en9110891
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Jan 31, 2019
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Calvin Tsay
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