Urbanization and energy intensity: evidence from the institutional threshold effect
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RESEARCH ARTICLE
Urbanization and energy intensity: evidence from the institutional threshold effect Zhongfei Chen 1,2 & Mengling Zhou 1 Received: 18 September 2020 / Accepted: 22 October 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This research, which considers the rapid growth of urbanization and the concerns about energy security, analyzes the effect of urbanization on energy intensity by using the panel data of 72 countries between 2000 and 2014. The impact of institutional quality on the relationship between urbanization and energy intensity is also evaluated on the basis of a panel threshold model. Results suggest that the increase in urbanization leads to higher energy intensity. However, this positive effect of urbanization on energy intensity can be weakened by 0.033 when the institutional quality exceeds the threshold value. The positive mediating effect of institutional quality comprises approximately 31.37% of the total effect. Furthermore, the institutional threshold effect varies across country income and energy types, and it promotes more energy reduction and less energy consumption in OECD and non-OECD groups, respectively. The institutional threshold effect is only significant for fossil energy group but not for the renewable energy group. Keywords Urbanization . Energy intensity . Institutional quality . Threshold effect
Introduction Urbanization has played a salient role in all countries in recent years along with the fast promotion of global industrialization. Statistics reveal that the urbanization process has pushed the word urban population to surpass the number of rural people in 2009, manifesting a sixfold increase since 1950, from 751 million to 4.3 billion in 2019 (Fig. 1). Moreover, approximately 68% of the world population is expected to become urban residents by 2050 (Fig. 2). Urbanization is the critical phenomenon of economic and social development (Poumanyvong and Kaneko 2010). The urbanization process involves the transfer of physical resources and rural labor productivity to urban manufacture to be able to cater the needs of economic growth (Madlener and Sunak 2011). Although urbanization contributes excellently to economic achievements (Moomaw and Shatter 1996), the rapid concentration of population in cities Responsible Editor: Nicholas Apergis * Mengling Zhou [email protected] 1
School of Economics, Jinan University, No.601 Huangpu West Road, Guangzhou, Guangdong, China
2
Institute of Resource Environment and Sustainable Development Research , Jinan University , Guangdong Guangzhou, China
leads to severe problems. Large-scale resource consumption due to urbanization has become a threat to resource reservation and environmental protection. Cities have been reported as the main demander of the world’s energy, consuming approximately 80% of total energy (Albino et al. 2015). In particular, the fast-growing urbanization process has led to increased energy consumption in developing countries (Al-mulali et al. 2013), placing high value on urbaniza
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