Research on the impact of energy price fluctuations on regional economic development based on panel data model

Liping Wang

Resources Policy, 2022, vol. 75, issue C

Abstract: In order to reveal the impact of energy price fluctuations on the economy, this paper selects data from 30 provinces in China (excluding Tibet) from 2005 to 2020, and uses the FMOLS cointegration estimation method to verify the relationship between energy price changes and regional economic growth. The conclusions are as follows: (1) from a national perspective, the changes in the price index of coal, electricity, and oil have an impact on China's domestic economy. The impact of GDP is negative with smaller elasticity coefficient, that is, energy prices have a small negative effect on China's overall economic development. Foreign direct investment (FDI) and industrial structure are both promoting the regional economic development. Consumer price index (CPI) impact on regional economic growth is positively correlated. The main reason is that rising prices can stimulate enterprises to expand production capacity and thus promote economic growth. (2) Energy prices fluctuations impact on the regional economic development in the eastern, central and western regions are basically consistent with the national results, but energy prices have the least impact on the east and the greatest negative impact on the west. The GDP of the eastern, central and western regions is also affected by foreign direct investment, industrial structure and price levels, all of which are positively correlated. Among them, FDI has the greatest effect in east of China, the industrial structure has the greatest impact in the central region, and the least on the western region; the price level has the greatest effect on the western region, mainly in the western region where resources are abundant, production capacity is low, and prices are rising. It can stimulate the expansion of production capacity, thereby promoting economic growth than the eastern and central regions.

Keywords: Energy prices; Economic growth; Panel data model (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:75:y:2022:i:c:s030142072100492x

DOI: 10.1016/j.resourpol.2021.102484

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