Understanding energy use growth: The role of investment-GDP ratio

Hua Liao, Ying Peng, Fang-Zhi Wang and Tong Zhang

Structural Change and Economic Dynamics, 2022, vol. 63, issue C, 15-24

Abstract: The aggregate analysis on the relationship between energy use and GDP growth may cloak important decision information. Among them, economic structure such as investment-GDP ratio is also vital to energy use. Employing a panel dataset of 64 large economies over 1972–2019, this study empirically investigates this issue. It finds that a higher ratio of investment to GDP is significantly associated with an increase in the growth rate of energy use, with an average effect size of 0.08. Two candidate mechanisms jointly contribute to such patterns: the growth of energy-intensive product and the changing ratio of industrial value added to GDP. The results show that economic structure transformation can help alleviate the pressure on energy demand.

Keywords: Economic growth; Energy use; Investment-GDP ratio (search for similar items in EconPapers)
JEL-codes: Q41 Q43 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:63:y:2022:i:c:p:15-24

DOI: 10.1016/j.strueco.2022.08.007

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