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Positive or negative? Study on the impact of government subsidy on the business performance of China's solar photovoltaic industry

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  • Luan, Ranran
  • Lin, Boqiang

Abstract

China's solar photovoltaic industry has developed by leaps and bounds with the support of government funds and policies over the past decade. Some studies indicate that the supporting effect of government subsidies is not invariable. With the decline or even cancellation of photovoltaic subsidies, the difference in the influence of different subsidy levels on enterprises' business performance is a problem worthy of study, but few papers have paid attention to this point. In this paper, 36 listed photovoltaic enterprises are selected as the research objects. Based on the data from 2012 to 2019, this study measures the comprehensive index of operating performance of photovoltaic industry by using global principal component analysis instead of the single indicator commonly used in existing studies. Further, a nonlinear model is established to study the government subsidy effect on the photovoltaic industry. The results show that the business performance of Chinese solar photovoltaic enterprises is greatly affected by the external environment and policies. There exists a U-shaped relationship between government subsidy and business performance. The decline of photovoltaic subsidies is inevitable. Targeted suggestions will be provided for the government and enterprises for the sustainable development of China's solar photovoltaic industry.

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  • Luan, Ranran & Lin, Boqiang, 2022. "Positive or negative? Study on the impact of government subsidy on the business performance of China's solar photovoltaic industry," Renewable Energy, Elsevier, vol. 189(C), pages 1145-1153.
    • Handle: RePEc:eee:renene:v:189:y:2022:i:c:p:1145-1153
    DOI: 10.1016/j.renene.2022.03.082
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    References listed on IDEAS

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    9. Danlei Feng & Mingzhao Hu & Lingdi Zhao & Sha Liu, 2022. "The Impact of Firm Heterogeneity and External Factor Change on Innovation: Evidence from the Vehicle Industry Sector," Sustainability, MDPI, vol. 14(11), pages 1-15, May.
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