Research On Electricity Consumption And Economic Growth In China Based On Quantile Regression

With the rapid development of economy, China has become the biggest country of electricity consumption in the world. At the same time, it has become one of the most serious environmental pollution countries. Keeping the economic growth, and at the same time responding to climate change actively, is a hard challenge of China in the future. Therefore, grasping the inherent laws of electricity consumption and economic development will help a lot for keeping normal development of the economy, issuing energy policies and treatment of the environment problems. This paper investigates the qualitative and quantitative relationship between electricity consumption and economic growth in China. We study the relationship from the overall point of view and also from provinces.From the overall point of view, through cointegration test, we reach that there is a long-run equilibrium relationship between electricity consumption and economic growth. Granger causality test based on error correction model shows, there is unidirectional causality from electricity consumption to economic growth in the long run, but no causality in the short-run. For analyzing the causality and influence degree in different levels of economic growth, we introduce quantile regression, which makes the analysis results more practical compared with the normal regression results. In the short-run, there is Granger causality running from electricity consumption to economic growth in the year when economic growth was above the middle level. The long-run balance mechanism will play a significant adjustment when economic growth at a higher level.From the province point of view, using provincial panel data, we test for a panel unit root and cointegration and establish a panel error correction model, and on this basis, we test the panel causality and the result shows that, there is a bidirectional causality between electricity consumption and economic growth in the short-run. But in the long-run, there only is unidirectional causality from electricity consumption to economic growth. Finally, using the panel quantile regression analysis, we find that, in different quantiles, there exist different causal relationships between electricity consumption and economic growth, and the influence degree are also different greatly.