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Coal price shocks and economic growth: A province-level study of China

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  • Lin, Boqiang
  • Song, Yijie

Abstract

Coal is the predominant energy source in China and exerts a significant influence on China's economic growth. This paper uses panel data to examine the impact of coal price shocks, which are decomposed into different types using the S-VAR method, on provincial economic growth in China from 2007 to 2021. Our results show that: (1) The impact of coal price shocks driven by the contemporaneous supply on economic growth is most significant. (2) The difference of the elasticity of GDP to coal prices becomes explicit when we differentiate the exporting and importing provinces. (3) Furthermore, we differentiate positive and negative coal price shocks and observe asymmetric impact pathways, which are mainly driven by exporters. Overall, our research proves the critical effect of coal prices on economic growth, especially for coal-exporting provinces. The economic impact of coal phase-out in China should be considered discreetly.

Suggested Citation

  • Lin, Boqiang & Song, Yijie, 2024. "Coal price shocks and economic growth: A province-level study of China," Energy Policy, Elsevier, vol. 193(C).
    • Handle: RePEc:eee:enepol:v:193:y:2024:i:c:s0301421524003173
    DOI: 10.1016/j.enpol.2024.114297
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