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Electricity Consumption and Economic Growth: Evidence from 17 Taiwanese Industries

Wen-Cheng Lu ()
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Wen-Cheng Lu: Department of Economics and Finance, Ming Chuan University, 5 De Ming Rd., Gui Shan District, Taoyuan City 333, Taiwan

Sustainability, 2016, vol. 9, issue 1, 1-15

Abstract: The current paper investigates the existence and nature of the Granger causality between electricity consumption and economic growth for 17 industries in Taiwan. Empirical results over the period 1998–2014 suggest that a panel cointegration test shows a long-run equilibrium relationship and a bi-directional Granger causality between electricity and economic growth has been found. The result indicates that a 1% increase in electricity consumption boosts the real GDP by 1.72%. The government can pursue energy conservation and carbon reduction policy in some industries without impeding the economic growth for adjusting the industrial structure.

Keywords: energy consumption; economic growth; panel cointegration; Granger causality (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2016
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