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Embracing uncertain times: An energy security perspective

Author

Listed:
  • Fang, Lei
  • Yu, Chin-Hsien
  • Li, Xinghao
  • Chiang, Jyun-You

Abstract

Energy is a substantial driving force in promoting social development. However, the current energy crisis has raised concerns about energy security. Based on provincial data from China from 2011 to 2020, a regional energy security index (ESI) is constructed and the relationship between energy security and foreign direct investment (FDI) inflows is systematically examined. We find that foreign investors tend to consider energy-related factors when choosing investment locations, suggesting that a higher regional ESI is positively correlated with FDI inflows. Further analysis using quantile regression reveals that fortifying energy security is particularly beneficial for provinces with moderate FDI inflows. In the heterogeneity analysis, we find that energy security has more pronounced effects in regions with higher geopolitical risks, extreme climate risks, and policy uncertainty. Finally, we discuss two policies aimed at promoting the orderly development of renewable energy sources and their role in enhancing energy security.

Suggested Citation

  • Fang, Lei & Yu, Chin-Hsien & Li, Xinghao & Chiang, Jyun-You, 2025. "Embracing uncertain times: An energy security perspective," Energy Economics, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:eneeco:v:144:y:2025:i:c:s0140988325001586
    DOI: 10.1016/j.eneco.2025.108334
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