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The effects of green fiscal policies and R&D investment on a firm's market value: New evidence from the renewable energy industry in China

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  • Chang, Kai
  • Xue, Chenqi
  • Zhang, Huijia
  • Zeng, Yonghong

Abstract

This article investigates the influences of subsidy and tax rebate policies and R&D investment on renewable energy firms' market value improvements using the generalized method of moments (GMM) to analyze firm-level panel data from the renewable energy industry in China. Our empirical evidence confirms that government subsidies and tax rebate policies result in significant inverted U-shaped relationships with market value improvements of renewable energy firms in China at the 10% significance level. In addition, greater R&D investment boosts the positive effects of subsidies, tax rebates and research and development (R&D) investment and decreases the negative effect of the subsidies and tax rebates on renewable energy firms' market value at the 10% significance level, respectively. The combined subsidy and tax rebate policies amplify the U-type impacts on the renewable energy firms' market value improvement. Moreover, location variations have significantly differentiated impacts of subsidies, tax rebates and R&D investment on the renewable energy firms’ market value in the study period.

Suggested Citation

  • Chang, Kai & Xue, Chenqi & Zhang, Huijia & Zeng, Yonghong, 2022. "The effects of green fiscal policies and R&D investment on a firm's market value: New evidence from the renewable energy industry in China," Energy, Elsevier, vol. 251(C).
    • Handle: RePEc:eee:energy:v:251:y:2022:i:c:s0360544222008568
    DOI: 10.1016/j.energy.2022.123953
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