IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v71y2023i3p675-727.html
   My bibliography  Save this article

Welfare analysis of the subsidies in the Chinese electric vehicle industry

Author

Listed:
  • Xiaodan Guo
  • Junji Xiao

Abstract

We employ a structural model and counterfactual analysis to identify the impact of subsidies on the Chinese electric vehicle (EV) sales and examine their welfare effects. Our findings suggest that subsidies are effective in promoting the diffusion of domestic EVs, but may adversely affect technological advancement. When the subsidies on domestic EVs are reduced, the welfare on domestic EV consumers and producers decreases. However, the reduction in government spending on EV subsidies outweighs this private welfare loss. Thus, the overall welfare increases. Subsidies cannot be justified from the perspective of reducing externalities because they increase rather than decrease pollution.

Suggested Citation

  • Xiaodan Guo & Junji Xiao, 2023. "Welfare analysis of the subsidies in the Chinese electric vehicle industry," Journal of Industrial Economics, Wiley Blackwell, vol. 71(3), pages 675-727, September.
    • Handle: RePEc:bla:jindec:v:71:y:2023:i:3:p:675-727
    DOI: 10.1111/joie.12337
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joie.12337
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joie.12337?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:71:y:2023:i:3:p:675-727. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.