Energy price, regulatory price distortion and economic growth: A case study of China

Shi, Xunpeng; Sun, Sizhong

doi:10.1016/j.eneco.2017.02.006

Cited by 114 publications

(59 citation statements)

References 32 publications

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“…Industrial output had a negative but less significant impact on real energy prices. Similarly, a past study suggests that regulatory energy price distortions negatively affect China's output growth during the short-as well as long-term [27]. Hence, real energy prices are exogenously determined but impact industrial output.…”

Section: Discussionmentioning

confidence: 93%

“…Given a policy restriction on prices, energy prices rarely reflect the actual changes in demand for energy. In China, energy prices have long been government-controlled rather than freely determined in the market [27]. Government-regulated price-caps for coal and electricity ultimately affected the energy supply and prices [62].…”

Section: Discussionmentioning

confidence: 99%

“…The Brent oil price has Energies 2018, 11, 1847 4 of 15 negatively influenced industrial growth in Romania [26]. However, government-controlled energy prices have led to price distortions and accordingly affect the long relationship between energy prices and demand for real estate [27].…”

Section: Literature Reviewmentioning

confidence: 99%

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Energy Prices, Real Estate Sales and Industrial Output in China

Chau

Zou

2018

Energies

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A majority of energy is consumed to control the indoor environment for human activities and industrial production. The demand for energies for these two uses are reflected in demand for different types of real estate and the volume of industrial outputs. The purpose of this study is to examine the long-run equilibrium and short-run dynamics between real energy prices and demand for different types of real estate and industrial output in China. Energy prices are measured in the real price of fuels and power. Demand for different types of real estate is measured in their sales volume in the first hand market, that is, floor areas of new real estate sold by developers. Industrial output is measured by the net output (value added) of the industrial sector. All data series were tested for stationarity (i.e., the existence of a unit root) before testing for a co-integration relationship. We found no long-term equilibrium relationship between energy prices and the demand for real estate and industrial output as predicted by theory, probably due to increased supply of energy efficient buildings. There is also no short-run relationship between energy prices and demand for housing due to the increase in vacancy rate resulting from speculative demand for housing. However, demand for commercial properties appeared to lead energy prices. Finally, there is strong evidence suggesting that an increase in energy prices will significantly reduce industrial output but not vice versa.

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Section: Discussionmentioning

confidence: 93%

Section: Discussionmentioning

confidence: 99%

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Energy Prices, Real Estate Sales and Industrial Output in China

Chau

Zou

2018

Energies

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“…Hence, freight demand in various modes of freight transportation has considered fuel prices less than otherwise. Substantial evidence supports government-controlled energy prices [48][49][50][51]. In particular, during the period 2010-2012, world crude oil prices at the 2018 constant dollar increased by 33.4% [52], while in Shanghai, prices of fuels and power at the 2000 constant price increased by only 16.6% [53], which is 16.8 percentage points less than the world oil price's growth.…”

Section: Discussionmentioning

confidence: 99%

Long- and Short-Run Effects of Fuel Prices on Freight Transportation Volumes in Shanghai

Zou

Chau

2019

Sustainability

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Freight transportation modes consume enormous amounts of energy. This paper estimates the long-and short-run effects of fuel prices on freight volumes in various modes of transportation in Shanghai. Data included monthly changes during the period 2009-2016. Air cargo series were suggested to include one or two unit roots, and hence were removed from the cointegration analysis. Both the Phillips-Ouliaris and Johansen tests did not detect long-run relationships between real fuel prices, water cargo, road, and rail freight. Conventional first-differenced VAR (vector autoregressive) models were estimated. Overall, whether in the short-or long-run, real fuel prices did not influence freight transportation volumes. However, we found a Granger causality running from rail to road freight, as in the short-run (one month), a 1% change in rail freight would lead to a reduction of 0.07% in road freight. Therefore, simply by increasing fuel prices, the government could seldom encourage the shift from energy-inefficient modes of freight transportation to energy-efficient ones to achieve a sustainable freight transport. The allocation of more time and routes for rail freight traffic and the reduction in rail freight taxes may increase the rail freight volume and hence decrease the overall energy use. Our findings, to some degree, contribute to freight transportation economics. Future research may examine the impact of gasoline prices or diesel prices on freight traffic volumes.

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“…In the developing countries, Arshad et al (2016) argued that energy price negatively impact on economic growth in the economy of Pakistan through the reduction of real interest rates, investment and stock prices, devaluation of real exchange rate, exploitation of government expenditures and unemployment in the country. Shi and Sun (2017) affirmed that oil price distortion has a negative effect on China's economic growth in both the short-run and long-run. In Iran, Yazdan et al (2012) claimed that oil price has a neutral effect on economic growth, while a unidirectional causal link runs from oil consumption to oil price.…”

Section: Review Of Related Literaturementioning

confidence: 99%

The impact of oil price and revenue variations on economic growth in Nigeria

2018

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The study investigates the relationship between oil price, revenue variation and economic growth in Nigeria. The study makes use of a secondary data spanning 1981 and 2016. The Auto‐regressive Distributed Lag was used to analyse the long‐run and short‐run relationship among the variables. The short‐run result shows that oil price and oil revenue positively significantly relates with economic growth, while consumer price index and exchange rate negatively relates with economic growth. In the long‐run, oil price, consumer price index and exchange rate positively relates with economic growth, while oil revenue negatively relates with economic growth. This implies that oil revenue has not been channelled in the direction of enhancing growth in Nigeria, while oil price has been in favour reason been that it determines a larger percentage of the country's revenue. From the findings, the study concludes that variations in oil price and oil revenue are strong determinant factors of economic growth in Nigeria. A major recommendation is that, oil revenue should be restructured towards the strategic sectors of the economy to aid the growth in Nigeria.

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Energy price, regulatory price distortion and economic growth: A case study of China

Cited by 114 publications

References 32 publications

Energy Prices, Real Estate Sales and Industrial Output in China

Energy Prices, Real Estate Sales and Industrial Output in China

Long- and Short-Run Effects of Fuel Prices on Freight Transportation Volumes in Shanghai

The impact of oil price and revenue variations on economic growth in Nigeria

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