Economic Policy Uncertainty Affects Renewable Energy Investment in China

A new study on the impact of economic policy uncertainty (EPU) on renewable energy investment in China has shed light on the crucial role of EPU in energy transition and energy security. The research, conducted by the University of Science and Technology China, selected a representative sample of 137 listed renewable energy firms from 2000 to 2020 to examine the influence of EPU on renewable energy investment. The findings revealed that EPU negatively impacts renewable energy investment, which can be alleviated by political connection and internal control. Furthermore, the effect of EPU on renewable energy investment varies across the firm's supply chain position, with significant inhibition for firms in the upstream supply chain position.

Key Takeaways:

• The study found that economic policy uncertainty (EPU) negatively impacts renewable energy investment in China, with a significant impact on firms in the upstream supply chain position.
• The negative effect of EPU on renewable energy investment can be alleviated by political connection and internal control.
• The study selected a representative sample of 137 listed renewable energy firms from 2000 to 2020 to examine the influence of EPU on renewable energy investment.
• The findings add to the existing literature on EPU and renewable energy investment and provide policy implications for governments and firms.
• The research highlights the importance of addressing EPU in promoting energy transition and achieving energy security.

Statistics:

• The study selected a representative sample of 137 listed renewable energy firms from 2000 to 2020.
• The findings revealed that EPU negatively impacts renewable energy investment, which can be alleviated by political connection and internal control.
• The study found that the effect of EPU on renewable energy investment varies across the firm's supply chain position, with significant inhibition for firms in the upstream supply chain position.
• The negative effect of EPU on renewable energy investment can be mitigated if firms have strong political connection and internal control.

Sources:

• Economic Policy Uncertainty and Renewable Energy Investment: an Empirical Study From Renewable Energy Firms In China. Economic Analysis and Policy, 2025;87:605-620.
• University of Science and Technology China, School of Public Affairs, 96 Jinzhai Rd, Hefei 230026, Anhui, People's Republic of China.
• Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands (publishers of Economic Analysis and Policy journal)