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.
Highlights
Natural gas (NG) is a low-carbon, clean, high-efficient energy and is a part of three mainstays of the global energy mix together with coal and oil
The general relationship between domestic demand for NG, gross domestic product, and aggregate domestic energy consumption can be represented in the following linear regression model: DAECt = ς0 + ς1GDPt + ς2DADNGt + ς3DANGPt + μt whereas DAECt represents domestic aggregate energy consumption in time periodt, GDPt indicates gross domestic product in time period t, DADNGt signifies domestic aggregate demand for natural gas in time period t, DANGP shows domestic aggregate natural gas production, ς0 is constant, ς1, ς2 and ς3 are respective coefficients
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
Summary
Natural gas (NG) is a low-carbon, clean, high-efficient energy and is a part of three mainstays of the global energy mix together with coal and oil. NG is the rapidly mounting primary energy source and is anticipated to be the fuel of choice for many developed and under developing economies (Lim & Yoo (2012) These days, the use of gas is rising due to many reasons, including fuel diversification, price, energy security, overall market growth, market deregulation and price (Yazici & Demirbas, 2001). Natural gas has grown in importance and is one of the most important sources of clean energy for heating in domestic uses during the last several decades (Boran, 2015). In 2015 the domestic aggregate demand for NG 193.2 bcm, an increase of merely 5.7% (Natural Gas Industry, 2016).
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