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From policy to practice: Enhancing enterprise productivity through energy transition initiatives

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  • Xiong, Zhiqiao
  • Hu, Jin
  • Li, Wenfeng

Abstract

This study investigates the impact of energy transition policies on enterprise Total Factor Productivity (TFP) in China, utilizing a quasi-natural experiment with New Energy Demonstration Cities (NEDC) and panel data from Chinese cities and manufacturing enterprises (2011–2021). Using the difference-in-difference method, the analysis reveals that energy transition policies positively affect enterprise TFP, especially in non-resource-based cities, less polluting industries, and enterprises with strong Environmental, Social, and Governance (ESG) performance. The research identifies two key mechanisms driving productivity gains: green innovation and reduced financing costs. Additionally, it examines the role of Environmental Regulation (ER), finding that formal ER can mitigate the positive impact of energy transition policies on enterprise TFP, while informal ER has a reinforcing effect. This study contributes to the broader understanding of the policy implications of energy transitions, highlighting the nuanced effects of different regulatory environments on enterprise development and providing evidence on sustainable growth in the context of climate imperatives. The findings offer insights into the complex dynamics between energy policy and industrial productivity, relevant to policymakers, industries, and stakeholders interested in the interplay between energy transition and economic sustainability.

Suggested Citation

  • Xiong, Zhiqiao & Hu, Jin & Li, Wenfeng, 2024. "From policy to practice: Enhancing enterprise productivity through energy transition initiatives," Energy, Elsevier, vol. 311(C).
    • Handle: RePEc:eee:energy:v:311:y:2024:i:c:s0360544224031372
    DOI: 10.1016/j.energy.2024.133361
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