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Frontiers in Energy

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ISSN 2095-1698(Online)

CN 11-6017/TK

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Front Energ    0, Vol. Issue () : 43-48    https://doi.org/10.1007/s11708-010-0135-5
RESEARCH ARTICLE
Causality relationship between the photovoltaic market and its manufacturing in China, Germany, the US, and Japan
Molin HUO1(), Xiliang ZHANG1, Jiankun HE2
1. Institute of Energy, Environment and Economy, Tsinghua University, Beijing 100084, China; 2. Institute of Low Carbon Economy, Tsinghua University, Beijing 100084, China
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Abstract

This paper aims to investigate the Granger causality relationships between the photovoltaic (PV) market scale and PV manufacturing development in China, Germany, the US, and Japan, and consequently provide recommendations for strategic investment and industrial policy making. The empirical results show that the growth of the market scale caused the increase in innovation scale in the four countries except China. Moreover, there were bidirectional causalities between them in Germany and in the US, respectively, suggesting that the strategic perspective and the formation of a virtuous circle could make PV industry policies cost effective. Only in China did the growth of the market scale cause the increase in production scale, implying significant market risk for the manufacturing sector. The empirical result shows that the manufacturing sector can affect the dynamics of the market scale.
Keywords photovoltaic      innovation      demand pull      scale economies      granger causality     
Corresponding Author(s): HUO Molin,Email:molin.huo@gmail.com   
Issue Date: 05 March 2011
 Cite this article:   
Molin HUO,Xiliang ZHANG,Jiankun HE. Causality relationship between the photovoltaic market and its manufacturing in China, Germany, the US, and Japan[J]. Front Energ, 0, (): 43-48.
 URL:  
https://academic.hep.com.cn/fie/EN/10.1007/s11708-010-0135-5
https://academic.hep.com.cn/fie/EN/Y0/V/I/43
Fig.1  Analytic framework
Sta.Critical value (5%)C,T,K
lnCM-4.218*-3.791,1,3ADFI(0)
lnCP-3.695-1.970,0,0ADFI(2)
lnCR-5.203-3.081,0,0ADFI(1)
lnGM-5.432-3.761,1,1ADFI(1)
lnGP-9.255-3.931,1,1ADFI(0)
lnGR-4.355-1.970,0,0ADFI(1)
lnJM-2.620*-1.971,0,0ERSI(1)
lnJP-2.299*-1.971,0,0ERSI(1)
lnJR-3.925-1.970,0,0ADFI(1)
lnUM-4.673*-3.761,1,0ADFI(1)
lnUP-1.994*-1.971,0,0ERSI(1)
lnUR-2.143*-1.971,0,0ERSI(1)
lnCRC-3.981*-3.761,1,0ADFI(1)
lnGRC-4.065*-3.881,1,3ADFI(1)
lnJRC-2.304*-1.971,0,0ERSI(1)
lnURC-4.922-3.831,1,2ADFI(1)
Tab.1  Results of the unit root tests
Sta.[Critical (5%)](C,T,K){}
lnCMlnCP-2.670[-2.01]*(0,0,1){0}
lnGMlnGR-2.989[-1.96](0,0,0){0}
lnUMlnUP-2.788[-1.97](0,0,3){0}
lnUMlnUR-2.924[-1.97](0,0,1){0}
lnUMlnURC-2.089[-1.97]*(0,0,0){0}
lnJMlnJP-1.814[-1.97]**(0,0,2){1}
lnJMlnJR-2.630[-1.97]*(0,0,0){0}
Tab.2  Results of the E-G cointegration tests
Null hypothesis lnX≠>lnYShort-runLong-runLag
Sta.[Prob.]Sta.[Prob.]
lnGM≠>lnGR4.22[0.077]*2.77[0.157]3
lnJM≠>lnJP1.91[0.217]2.85[0.135]2
lnJM≠>lnJR2.29[0.220]37.99[0.004]*3
lnUM≠>lnUP0.00[0.961]1.90[0.199]1
lnUM≠>lnUR11.35[0.006]*4.52[0.071]*2
lnCM≠>lnCP13241[0.006]*8260[0.007]*2
lnJP≠>lnJM2.97[0.108]0.00[0.961]2
lnUP≠>lnUM6.62[0.020]*0.01[0.909]2
lnCP≠>lnCM1.05[0.568]1.70[0.417]2
lnURC≠>lnUM4.50[0.049]*0.67[0.437]2
Tab.3  Wald F-test statistics from VEC estimation
Null hypothesisSta.[Prob.]Lag
lnCM≠>lnCR0.43[0.521]1
lnGM≠>lnGP0.93[0.452]2
lnGP≠>lnGM10.43[0.012]*1
lnCRC≠>lnCM1.01[0.334]1
lnGRC≠>lnGM4.27[0.062]*3
lnJRC≠>lnJM0.59[0.577]2
Tab.4  Wald F-test statistics from VAR estimation
Market scale
ChinaGermanyUnited StatesJapan
Manufacturing sectorInnovation scale↙[S](3)- +↙[S,L](2) +↙[L](3) +
Knowledge stock↗[V](3) + -↗[S](2) +
Production scale↙[S,L](2) +↗[V](1) + -↗[S](2)- +
Tab.5  All the causalities in the four countries
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