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Do value-added tax incentives encourage corporate risk-taking and growth in the new energy sector? Evidence from Chinese listed firms

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  • Du, Lei
  • Xu, Shikai
  • Ren, Shenggang

Abstract

Value-added tax (VAT) incentives, while widely employed as a fiscal policy instrument, have received limited scholarly attention with respect to their role in promoting new energy development—particularly in terms of how such incentives can accelerate the growth of China's new energy industry. This paper constructs a quasi-natural experiment using longitudinal panel data from 820 Chinese listed firms and employs a difference-in-differences (DID) model to identify the causal effects. The results show that new energy VAT incentives significantly increase the risk-taking level of firms in the new energy sector. Mechanism tests suggest that these VAT incentives promote risk-taking by alleviating financing constraints and enhancing asset specificity. Heterogeneity analysis shows that the positive influence of VAT incentives on risk-taking is present only for small and growth-stage firms. Additionally, VAT incentives boost firm value by promoting scale expansion rather than R&D investment, offering important insights for refining future policy designs aimed at supporting the industry's sustainable development.

Suggested Citation

  • Du, Lei & Xu, Shikai & Ren, Shenggang, 2026. "Do value-added tax incentives encourage corporate risk-taking and growth in the new energy sector? Evidence from Chinese listed firms," Energy Economics, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:eneeco:v:155:y:2026:i:c:s0140988326000861
    DOI: 10.1016/j.eneco.2026.109207
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