Economic growth and infrastructure investments in energy and transportation: A causality interpretation of China’s western development strategy

Alice SHIU, Raymond LI, Chi Keung WOO

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Were the large investments in energy and transportation infrastructure effective in fostering economic growth? Or did economic growth trigger these infrastructure developments? To answer these questions, we develop a simple model of production capacity constraints and use China's Western Development Strategy (WDS) as an example to investigate how the relationships among energy investment, transportation infrastructure expansion and economic growth differ in the pre-and post-WDS periods. Our Granger causality analysis uses a panel data sample for China's 30 provinces in the Western and non-Western regions for the period of 1991-2012. We find Granger causality only in the post-WDS period from transportation infrastructure expansion to economic growth and from economic growth to energy investment. These results suggest energy and transportation capacity constraints in the post-WDS period but not the pre-WDS period. Their policy implication is that China should continue its energy and transportation infrastructure investments with improved coordination. Copyright © 2016 by the IAEE.
Original languageEnglish
Pages (from-to)211-222
JournalThe Energy Journal
Volume37
Issue numberChina Special Issue
DOIs
Publication statusPublished - 2016

Fingerprint

Western China
Infrastructure investment
Energy
Economic growth
Causality
Development strategy
Transportation infrastructure
China
Capacity constraints
Granger causality
Trigger
Panel data
Infrastructure development
Policy implications
Production capacity

Citation

Shiu, A., Li, R., & Woo, C.-K. (2016). Economic growth and infrastructure investments in energy and transportation: A causality interpretation of China’s western development strategy. The Energy Journal, 37(China Special Issue), 211-222.

Keywords

  • Economic growth
  • Energy and transportation infrastructures
  • Causality
  • China