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Transportation infrastructure development and China’s energy intensive industries - A road development perspective

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  • Tan, Ruipeng
  • Liu, Kui
  • Lin, Boqiang

Abstract

In this paper, we investigate how road infrastructure affects the energy consumption and development of energy intensive industries in China. From the perspective of profit function, the endogeneity problem which may be caused by reverse causality can be avoided. China’s provincial data for the period 2000–2013 and seemingly uncorrelated regression method are used to estimate the parameters. The results show that increase in road density will increase energy consumption and promote the development of energy intensive industries. The short term elasticity of output with respect to road infrastructure is smaller than the long run elasticity. However, this is not the case for energy consumption. Additionally, increase in road density can reduce energy intensity only in the long run and the decrease is largest in western China. Therefore, more road construction in the western regions will be more helpful for energy intensive industries in their bid to reduce energy intensity. Furthermore, we find evidence of energy price distortion in China’s energy intensive industries. Lastly, we calculate the changes in output and energy consumption of China’s energy intensive industries both in the short and long run caused by the increase in road density from 2000 to 2013.

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  • Tan, Ruipeng & Liu, Kui & Lin, Boqiang, 2018. "Transportation infrastructure development and China’s energy intensive industries - A road development perspective," Energy, Elsevier, vol. 149(C), pages 587-596.
    • Handle: RePEc:eee:energy:v:149:y:2018:i:c:p:587-596
    DOI: 10.1016/j.energy.2018.02.041
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