Economic growth, electricity consumption, and urbanization in China: A tri-variate investigation using panel data modeling from a regional disparity perspective.

This paper aims to examine the causal relations between economic growth, electricity consumption, and urbanization indicators. Heterogeneous panel data techniques are performed to help shed light on the importance of the heterogeneity among three economic regions within China from 2000 to 2017. Our results show that the three indicators are all stationary and cointegrated after the first difference. Heterogeneity of the Granger causality is found between these three variables varies across the eastern, central, and western economic regions in China. In the long run, the eastern region presents a similar trend as the national level that long-run Granger causality of the three variables is found. Conversely, there is a unidirectional long-run causal relationship from economic growth to electricity consumption in the central region, while there is a bi-directional long-run causal relationship between economic growth and electricity consumption in the western region in China. Our empirical findings highlight the "urbanization ladder" effect which implies that as development, urbanization factor in the eastern region may play a promotion role in the tri-variate system when the urbanization reaches a higher level, while it may lack the influence in the central and western regions of China. From a regional perspective, it is further indicated that the improvement of urbanization can be practical measures in the central and western parts of China in the long run. • Economic growth, electricity consumption, and urbanization are cointegrated in eastern, central, and western China. • Granger causalities between the three variables vary across the three economic regions in China. • Urbanization does not have a causal effect on economic growth & electricity consumption in central-western China. • It is essential to accelerate the urbanization process in the central-western areas in China in the long run. [ABSTRACT FROM AUTHOR]