Effects of country risks and government subsidies on renewable energy firms’ performance: Evidence from China

Zhang, Wenwen; Chiu, Yi‐Bin; Hsiao, Cody Yu‐Ling

doi:10.1016/j.rser.2022.112164

Cited by 53 publications

(13 citation statements)

References 65 publications

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“…Enterprises may mitigate perceived risks, improve their creditworthiness, and get easier access to GF choices by incorporating ESG factors into their operational and investment strategies (World Economic Forum, 2019). These results are in line with the empirical works of Guang-Wen and Siddik (2023), Khan, Haouas, et al (2023), Zhang et al (2022), and Gu et al (2023) in the existing literature.…”

Section: Resultssupporting

confidence: 92%

Drivers of Sustainable Green Finance: Country’s Level Risk and Trade Perspective for OECD Countries

Wang,

Destek,

Weimei

et al. 2023

The Journal of Environment & Development

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In contemporary times, developed economies are adopting environmentally friendly initiatives such as green finance and energy efficiency. However, the factors affecting energy efficiency are widely explored, and green finance remains overlooked in the empirical literature. The present research examines the drivers of sustainable green finance in OECD economies during 2004–2021. The study uses several panel diagnostic tests and validates the mixed integration order of the variables. Still, the long-run equilibrium relationship is valid between financial inclusion, energy efficiency, human capital, foreign trade, composite risk, and green finance. Using panel autoregressive distributed lag model, the study found that financial inclusion, energy efficiency, foreign trade, and composite risk significantly improve green finance in the long run. However, only energy efficiency is effective in the short run. On the other hand, human capital exhibits a significant adverse influence on green finance. The long-run results are robust due to the significant estimates offered by panel dynamic ordinary least square. Besides, there exist one-way and two-way causal associations between variables. The study recommends improving the financial sector performance to enhance financial inclusivity, increase investment in the energy efficiency sector, and encourage trade in environmentally friendly initiatives.

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Section: Resultssupporting

confidence: 92%

Drivers of Sustainable Green Finance: Country’s Level Risk and Trade Perspective for OECD Countries

Wang,

Destek,

Weimei

et al. 2023

The Journal of Environment & Development

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“…35,36 Yang et al 37 argue that differential electricity prices lead to a decline in output, revenue, and profits for energy-intensive firms in the Hunan province of China. Zhang et al 38 indicate that country risk, and renewable energy subsidies are closely correlated with the performance of listed new energy firms, with similar findings obtained by Qi et al 39 Comprehensively, Liu et al 16 compare the impact of green credit policies, differential electricity prices, and increased production taxes on energy-intensive industries and find that green credit policy reduces the total amount of financing for the industry and are detrimental to the investment and economic output of the industry.…”

Section: Background and Literature Reviewmentioning

confidence: 54%

Economic policy uncertainty and firm performance: Evidence from the energy-intensive industry in China

Jin

2022

Energy & Environment

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As a result of high energy consumption and pollution from energy-intensive industries, the Chinese government has implemented a series of policies. A comprehensive assessment of these policies is necessary to guide the green transformation and upgrading of the industry, however, little research has been conducted on this issue. This article takes China's economic policy uncertainty (EPU) Index as a comprehensive and continuous policy shock and investigates the impact of EPU on the financial performance of energy-intensive firms. Based on 289 listed energy-intensive companies from 2003 to 2018, we find that EPU negatively affects the financial performance of firms, and the negative effect is robust after replacing the dependent variable and endogenous discussion. Further, the negative impacts are more pronounced for midwestern, non-SOE firms, as well as ferrous metal and chemical product manufacturers. Moreover, our results indicate that the negative impact of EPU on performance is mitigated for firms with high cash holdings and low debt ratios.

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“…The rapid growth of production and consumption in the early development stage of the NEV industry is the result of large-scale financial support and various policies provided by the government [16]. It has been argued that the scale of subsidies determines how they affect firms' R&D behavior; that the innovation efficiency decreases when the subsidies are small-scale and increases when public subsidies reach a certain size [17].…”

Section: Public Subsidies and Sti Capabilitymentioning

confidence: 99%

The Impact of Firm Heterogeneity and External Factor Change on Innovation: Evidence from the Vehicle Industry Sector

Feng

Zhao

et al. 2022

Sustainability

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We explore the connection between firms’ technological innovation capabilities and their internal and external factors. To empirically test this relationship, we use panel data for new energy vehicle (NEV) firms and traditional fuel vehicle firms in China from 2010 to 2020. Our findings show that public subsidies do have a positive impact on firms’ technology innovation capability, and there are consistent findings for both NEV and traditional fuel vehicle firms. Firms have a supportive effect on their innovative ability when they satisfy conditions of high profitability, low leverage, high equity concentration, and highly educated employees. The inability to maximize the effectiveness of public subsidies is due to an imbalance in the internal and external factors of firms. Therefore, we innovatively analyze the internal and external factors of NEV firms as an integrated system, taking into account the high correlation between them, rather than discussing them separately. The paper is not only of academic significance to the development of NEV firms to improve their technological innovation capability and the transformation of traditional fuel vehicle firms, but also of practical significance to the reduction of greenhouse gas emissions and the achievement of the “double carbon” goal.

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Effects of country risks and government subsidies on renewable energy firms’ performance: Evidence from China

Cited by 53 publications

References 65 publications

Drivers of Sustainable Green Finance: Country’s Level Risk and Trade Perspective for OECD Countries

Drivers of Sustainable Green Finance: Country’s Level Risk and Trade Perspective for OECD Countries

Economic policy uncertainty and firm performance: Evidence from the energy-intensive industry in China

The Impact of Firm Heterogeneity and External Factor Change on Innovation: Evidence from the Vehicle Industry Sector

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