Cointegration analysis of the export trade and energy consumption of Beijing

Abstract

This paper does empirical analysis for the relationship between the energy consumption and export trade of Beijing based on the data about the total energy consumption and total export trade volume of Beijing during the period from 1980 to 2009 and by making use of a cointegration theory and a Granger causality test and establishing an error correction model (ECM). According to the analysis result, the energy consumption and export trade of Beijing had a cointegration relationship, namely a long-term equilibrium relationship and the changes of energy consumption of Beijing were the causes of the changes of the export trade scale of Beijing, which suggests that the energy consumption of Beijing had a certain promoting impact on the export trade of Beijing. It is therefore necessary for Beijing to ensure a equilibrium relationship between its energy consumption and export trade on the basis of sound and fast development of its economy so that its export trade can develop in a healthy way while its energy safety is guaranteed.