Steel Consumption and Economic Development in China and India : An Econometric Analysis

The purpose of this thesis was to analyze the relationship between economic development and steel consumption in China and India using the intensity of steel use hypothesis. In doing this, we test whether there is an inverted u-shaped relationship between the intensity of steel use, i.e., steel consumption/GDP, and GDP per capita. The analysis of steel consumption in the two nations was performed with two linear regression models using time data for the period 1970-2018. The empirical results for China support the intensity of steel hypothesis and indicate that the peak for intensity of steel use in the country already has been reached. The results for India only support the hypothesis in one of the model specifications, and in the other we were not able to achieve statistical significance