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Micro-mechanisms of digitalization-driven financing for renewable energy: Growing capital pools and shifting flows

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  • Wang, Siquan
  • Du, Anna Min
  • Lin, Boqiang

Abstract

Recent facts from China suggest that the advancement of digitalization is altering the market expectations regarding renewable energy. Limited studies have offered evidence encompassing the stock effect of digitalization that enhanced corporate financing and the flow effect that initiated speculative behavior. However, a comprehensive discourse remains insufficient. This paper investigates the synergetic effects of digitalization's stock and flow on renewable energy financing, employing the business data of all listed companies in China from 2003 to 2023. The results demonstrate that: (1) Digitalization's stock has expanded the potential fund pool for renewable energy financing, yet it is challenging to influence the flow of funds; digitalization's flow has triggered a flood of funds into the renewable energy industry, but this relies on the new investors attracted by the stock. (2) The synergetic effect governs the systematic influence of digitalization on renewable energy financing and mitigates the measurement bias when considering only a single effect. (3) We further contemplate the indirect effects of renewable energy market expansion, technological progress, and global energy market fluctuations, alleviating concerns regarding the omitted variable bias. The results of the differential regression and generalized method of moments also indicate the robustness of the conclusion.

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  • Wang, Siquan & Du, Anna Min & Lin, Boqiang, 2025. "Micro-mechanisms of digitalization-driven financing for renewable energy: Growing capital pools and shifting flows," Research in International Business and Finance, Elsevier, vol. 73(PA).
    • Handle: RePEc:eee:riibaf:v:73:y:2025:i:pa:s0275531924004264
    DOI: 10.1016/j.ribaf.2024.102633
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