Electricity consumption and metropolitan economic performance in Guangzhou: 1950-2013

- The energy-growth nexus is examined for a major Chinese metropolitan economy.
- Unidirectional Granger causality runs from electricity usage to economic growth.
- Unidirectional causality also runs from the capital stock to economic growth.

This study analyzes the relationship between electricity consumption and metropolitan economic growth for Guangzhou, China using 64 years of annual-frequency data. The capital stock is used as a control variable because of its role in mediating the relationship between energy utilization and economic output. Empirical results indicate unidirectional Granger causality from electricity consumption to metropolitan economic performance in the short run. This is consistent with the argument that dependable electricity infrastructure and service can play a vital role in facilitating economic growth. Implications for conservation efforts and regional development are discussed.