Shale gas development and regional economic growth: Evidence from Fuling, China.

Climate change, the imbalance between China's domestic energy supply and demand, and the success of the shale gas revolution in the United States have been the main motivators for China to actively issue shale gas development policies and explore its own path on this industry. This paper estimates three indicators of economic development: regional GDP, employment level, and the housing price index by using data from China's largest shale gas region, the Fuling District in Chongqing (a municipality in China). The analysis uses a Synthetic Control Method (SCM) model based on data from Fuling itself and other 34 counties of the Chongqing municipality over the period from 2005 to 2018. The results demonstrate that shale gas development has a significant positive effect on both regional GDP and employment level, with average impact growth rates respectively of 9.8% and 12.0%. By contrast, we find an insignificant effect of shale gas development on housing prices. These results support the case for further development of shale gas in China. Note that in some areas our results differ from existing literature, providing a reference for further research in this area. • We estimate the effect of shale gas development on the regional economy in China. • We apply the Synthetic Control Method for model identification. • We find a positive effect of shale gas development on regional GDP and employment. [ABSTRACT FROM AUTHOR]