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Energies 2016, 9(11), 891; doi:10.3390/en9110891

Economic Growth, Electricity Consumption, Labor Force and Capital Input: A More Comprehensive Analysis on North China Using Panel Data

1
School of Economics and Management, North China Electric Power University, Beijing 102206, China
2
North China Grid Company Limited, Beijing Xuanwu District No. 482 Canton Avenue, Beijing 100053, China
*
Author to whom correspondence should be addressed.
Academic Editor: Robert Lundmark
Received: 23 August 2016 / Revised: 10 October 2016 / Accepted: 26 October 2016 / Published: 29 October 2016
(This article belongs to the Special Issue Applied Energy System Modeling 2016)
View Full-Text   |   Download PDF [1627 KB, uploaded 29 October 2016]   |  

Abstract

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. View Full-Text
Keywords: electricity consumption; economic growth; labor force and capital input; panel co-integration test; granger causality test electricity consumption; economic growth; labor force and capital input; panel co-integration test; granger causality test
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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. Energies 2016, 9, 891.

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