Interprovincial Transfer Entropy Analysis on Electricity Consumption by Secondary and Tertiary Industries

Abstract

As electricity consumption is direct feedback of the production and operation state of an industry, there should be links between lead-lag relation in electricity consumption volumes and driving/transferring effects cross regions and industries. In this paper, lead-lag relation between provincial secondary industry (SI) and tertiary industry (TI) electricity consumption volumes is studied based on transfer entropy (TE) theory. Significant TE flow from SI to TI is observed both intra-provincially and interprovincially in a large part of China and periodic fluctuations in electricity consumption curves of SI emerge stably one month ahead of that of TI. It is also found that the curves of SI electricity consumption show more significant correlation with economic cycle in GDP than that of TI. Meanwhile, in both SI and TI cases, Shanghai (SH) manifests noticeable driving effect on other provinces, especially those in Yangtze River Economic Belt. Maximum spanning arborescence topology is built to exhibit direct affecting routes with maximized TE flows of SI and TI from SH to other provinces in the Belt. It is deduced that in SI case it takes stages for the influence from SH to spread while in TI case the influence tends to directly radiate elsewhere. The study attempts to propose an approach to looking through the economy from a perspective of electricity consumption and provide a reference for making industrial strategy.