The Impact of Electricity Grid Development on Economic Growth and Energy Consumption in Anhui Province: A Seemingly Unrelated Regression-Based Analysis

Endogeneity is an important issue that needs to be addressed in research. By integrating infrastructure into the input–output system based on a profit function framework, this paper investigates the impact of electricity infrastructure on economic development and energy consumption. Using city-level data from Anhui Province spanning 2012 to 2022 and applying seemingly unrelated regression techniques for parameter estimation, this study finds that an increase in grid density leads to a reduction in energy consumption. While the short-term effect of increased grid density may cause a decline in output, a positive long-term effect on output is observed. This study concludes that the advantages of robust power infrastructure in lowering energy intensity manifest only over an extended time horizon. Based on our findings, we provide relevant recommendations that can be applied to other regions as well.