• pISSN 2523-2614, eISSN 2663-693X
  • Annual Publication Open Access
  • Current Issue
Article

Impact of shocks in domestic aggregate demand for natural gas (DADNG) on domestic aggregate energy consumption (DAEC) in China

  • 2018 | Volume: 2 | Issue: 1 | Page: 18-25

Abstract

This paper examines the possible asymmetric transmissions from domestic aggregate demand for natural gas to domestic aggregate energy consumption in China using time series data from 1970 to 2016. The nonlinear autoregressive distributed lags (NARDL) model is employed to check the possibility of long-term asymmetric nexus among variables. The empirical findings confirm the existence of symmetric cointegration between the domestic aggregate demand for natural gas and domestic aggregate energy consumption. The results also indicate that positive shocks in domestic aggregate energy consumption lead an increase in domestic aggregate energy consumption in both short-run and long-run. While the NARDL dynamic multiplier graph suggests that the positive component of domestic aggregate demand for natural gas has deep impact on domestic aggregate energy consumption.

Keywords and JEL Classification

Keywords

Energy Consumption, Demand of Natural Gas; Natural Gas Production; China

JEL Classification

E20; Q11; Q41

1. Introduction

2. Research Methods

3. Empirical Results & Discussion

4. Conclusion

   The current explored the linkages between gross domestic demand (GDP), domestic aggregate demand for natural gas (DADNG), domestic aggregate natural gas production (DANGP) and domestic aggregate energy consumption (DAEC) by utilizing the methodology of non-linear ARDL over the period of 1970-2016 for China. The ADF and PP unit root tests are employed to check the variables for an order of integrations. The results of both unit root tests indicated that all the variables are I(1). The NARDL bound test showed that there exists a long-run association among sample variables. While Wald test confirmed that there exist both short-run and long-run symmetric linkage between DADNG and DAEC. The findings also inferred that GDP is an important factor of DAEC in both long-run and short-run.

References

Bilgili, F. (2014). Long Run Elasticities of Demand for Natural Gas: OECD Panel Data Evidence. Energy Sources, Part B: Economics, Planning, and Policy , 9:4, 334-341.

Boran, F. E. (2015). Forecasting Natural Gas Consumption in Turkey Using Grey Prediction. Energy Sources, Part B: Economics, Planning, and Policy , 10:2, 208-213.

BP Statistical Review of World Energy. (2017).

BP statistical review of world energy June 2015. London, UK: BP company; 2015. (n.d.). Available at: 〈http://www.bp.com/content/dam/bp/pdf/Energy-economics/statistical-review-2015/bp-statistical-review-of-world-energy-2015-full-report.pdf〉 [accessed 05.04.2018].

Dong, X., Pi, G., Ma, Z., & Dong, C. (2017). The reform of the natural gas industry in the PR of China. Renewable and Sustainable Energy Reviews , 73: 582-593.

Li, B., Yin, H., & Wang, F. (2018). Will China’s “dash for gas” halt in the future? Resources, Conservation & Recycling , 134: 303-312.

Lim, H.-J., & Yoo, S.-H. (2012). Natural Gas Consumption and Economic Growth in Korea: A Causality Analysis. Energy Sources, Part B: Economics, Planning, and Policy , 7:2, 169-176.

Natural Gas Industry, 2016. (n.d.). Natural Gas Operational Performances. (accessed 02.04.18).

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). BOUNDS TESTING APPROACHES TO THE ANALYSIS OF LEVEL RELATIONSHIPS. JOURNAL OF APPLIED ECONOMETRICS , 16, 289–326.

Qian, X., Duan, Z., & Wang, H. (2013). Development status and prospects of China's natural gas industry. Econ Anal China Pet Chem Ind , 11:22–6.

Shin, C., Baek, J., & Heo, E. (2018). Do oil price changes have symmetric or asymmetric effects on Korea’s demand for imported crude oil? Energy Sources, Part B: Economics, Planning, and Policy , 13:1, 6-12.

Shin, Y., Yu, B., & Greenwoo, M. (2013). Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework. New York: Springer.

Yazici, N., & Demirbas, A. (2001). Turkey’s natural gas necessity and consumption. Energ. Source , 23:801–808.

Zhang, K. (2014). Natural gas supply-demand situation and prospect in China. Nat Gas Ind , 34(1):10–7.

Zhang, Y., Ji, Q., & Fan, Y. (2018). The price and income elasticity of China's natural gas demand: A multi-sectoral perspective. Energy Policy , 113, 332-341.

Citing Articles (0)
»

Article Metrics
Views
579
Downloads
569
Citation Indexes
0