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Chinese Renewable Energy Technology Exports: The Role of Policy, Innovation and Markets

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  • Felix Groba

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  • Jing Cao

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Abstract

Chinese companies have become major technology producers, with the largest shares of their output exported. This paper examines the development of solar PV and wind energy technology component (WETC) exports from China and the competitive position of the country‘s renewable energy industry. We also describe the government’s renewable energy policy and its success in renewable electricity generation as well as increasing renewable energy innovation and foreign knowledge accumulation, which may drive export performance. We aim at empirically identifying determinants of Chinese solar PV and WETC exports. We estimate a gravity trade model using maximum likelihood estimation. Besides controlling for standard variables, we consider additional explanatory factors by accounting for market, policy and innovation effects steaming from both importing countries and China. We use a panel dataset representing bilateral trade flows of 43 developed and developing countries that imported solar PV and WETCs from China between 1996 and 2008. Empirical results indicate that high income countries, with large renewable energy markets and demand side policy support schemes, in terms of incentive tariffs, are increasingly importing Chinese solar PV components. We show that trade costs have a negative impact on exports of solar PV components but not WETC. Additionally, we find a positive impact of research and development appropriation growth, especially from provincial governments in China, but no evidence that bilateral knowledge transfer and indigenous innovation affect exports. Copyright Springer Science+Business Media Dordrecht 2015

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  • Felix Groba & Jing Cao, 2015. "Chinese Renewable Energy Technology Exports: The Role of Policy, Innovation and Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(2), pages 243-283, February.
  • Handle: RePEc:kap:enreec:v:60:y:2015:i:2:p:243-283
    DOI: 10.1007/s10640-014-9766-z
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    Cited by:

    1. Juliana Subtil Lacerda & Jeroen C. J. M. van den Bergh, 2014. "International Diffusion of Renewable Energy Innovations: Lessons from the Lead Markets for Wind Power in China, Germany and USA," Energies, MDPI, Open Access Journal, vol. 7(12), pages 1-28, December.
    2. Patrice Bougette & Christophe Charlier, 2017. "Antidumping and Feed-In Tariffs as Good Buddies? Modeling the EU-China Solar Panel Dispute," GREDEG Working Papers 2017-17, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    3. Qing Guan & Haizhong An & Xiaoqing Hao & Xiaoliang Jia, 2016. "The Impact of Countries’ Roles on the International Photovoltaic Trade Pattern: The Complex Networks Analysis," Sustainability, MDPI, Open Access Journal, vol. 8(4), pages 1-16, March.
    4. Martin Kalthaus, 2017. "Identifying technological sub-trajectories in photovoltaic patents," Jena Economic Research Papers 2017-010, Friedrich-Schiller-University Jena.
    5. Sung, Bongsuk & Song, Woo-Yong, 2014. "How government policies affect the export dynamics of renewable energy technologies: A subsectoral analysis," Energy, Elsevier, vol. 69(C), pages 843-859.
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    8. Fan, Xiao-chao & Wang, Wei-qing, 2016. "Spatial patterns and influencing factors of China׳s wind turbine manufacturing industry: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 482-496.
    9. Sung, Bongsuk, 2015. "Public policy supports and export performance of bioenergy technologies: A dynamic panel approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 477-495.
    10. Zhang, Sufang & Andrews-Speed, Philip & Ji, Meiyun, 2014. "The erratic path of the low-carbon transition in China: Evolution of solar PV policy," Energy Policy, Elsevier, vol. 67(C), pages 903-912.
    11. P. Fabbri & A. Ninni, 2015. "Environmental Problems and Development Policies for Renewable Energy in BRIC Countries," Economics Department Working Papers 2015-EP02, Department of Economics, Parma University (Italy).
    12. Mai Miyamoto & Kenji Takeuchi, 2018. "Explaining Trade Flows in Renewable Energy Products: The Role of Technological Development," Discussion Papers 1819, Graduate School of Economics, Kobe University.

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    Keywords

    China; Gravity model; Trade; Innovation; Policy; Renewable energy technologies; C32; F14; O30; Q42; Q48; Q56;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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