Research on multiple effects of fixed-asset investment on energy consumption--by three strata of industry in China

Environ Sci Pollut Res Int. 2020 Nov;27(33):41299-41313. doi: 10.1007/s11356-020-10094-7. Epub 2020 Jul 17.

Abstract

Fixed-asset investment directly affects energy consumption through purchasing and upgrading energy-saving equipment on the one hand, and indirectly affects energy consumption by expanding output scale on the other hand. This paper analyzes the multiple effects of fixed-asset investment on energy consumption by three strata of industry in China during 1991-2017. The econometric methods based on VAR model such as Johansen co-integration test and Granger causality test (linear Granger causality test and non-linear Granger causality test) are utilized to explore the long-run stable equilibrium relationships and causal interactions between fixed-asset investment and energy consumption. And the mediation test is performed by employing the bias-corrected non-parametric percentile bootstrap method combined with causal steps approach to obtain the direct and indirect effects of fixed-asset investment on energy consumption. Our study indicates that there are long-run stable equilibrium relationships between fixed-asset investment and energy consumption by three strata of industry. Bidirectional causalities exist in secondary and tertiary industries between fixed-asset investment and their respective energy consumption, and a unidirectional causality exists in primary industry from fixed-asset investment to energy consumption. The fixed-asset investment in primary industry directly suppresses its energy consumption, while indirectly promotes its energy consumption through its value added. And the fixed-asset investment in secondary industry not only directly promotes its energy consumption but also indirectly promotes its energy consumption through its value added.

Keywords: Bootstrap method; Energy consumption; Fixed-asset investment; Mediation test; Multiple effects; Value added.

MeSH terms

  • Carbon Dioxide* / analysis
  • China
  • Economic Development*
  • Gross Domestic Product
  • Investments

Substances

  • Carbon Dioxide