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Thresh Effects and Spatial Spillover of Electricity Consumption on Economic Growth

Volume 13, Number 4, July 2017 - Paper 9 - pp. 418-426
DOI: 10.23940/ijpe.17.04.p9.418426

Liping Guoa, Jie Zhoua, Xiaowei Yangb

aState Grid Zhejiang Yuyao Power Supply Company, Yuyao315400, Zhejiang, China
bNingbo City College of Vocational Technology, Ningbo315100, Zhejiang, China

(Submitted on January 2, 2017; Revised on April 15, 2017; Accepted on June 13, 2017)

Abstract:

The importance of the supply of electricity to economic growth is self-evident. However, the existing research mostly focuses on the linear relationship between electricity consumption and economic growth, while ignoring the nonlinear relationship between them. What’s more, the existing research also ignores the spatial correlation of power consumption and its spillover effect on economic growth. In order to address the deficiency of the existing research, this study empirically analyzes the effects of Chinese provincial electricity of economic growth based on the panel threshold model and panel spatial model with 30 provincial samples from 1995 to 2014. The results show that China's power consumption causes threshold effect and spatial spillover on economic growth. When per capita GDP, per capita consumption expenditure, and per capita investment exceed a certain threshold, the positive role in stimulating economic growth of electricity consumption is significantly different from those of the elasticity when the per capita GDP, per capita consumption expenditure, and per capita investment do not exceed the corresponding thresh value. Not only does the local electricity consumption significantly promote economic growth of the local region, the electricity consumption spillover effects of the adjacent provinces can also promote the economic growth of the local region. If the spatial spillover effect of electricity consumption is neglected, the supportive effect of electricity consumption on economic growth will be underestimated.

 

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