The Impact of Economic Policy Uncertainty on the Performance of New Energy Firms

Abstract

In China, the development of a new energy sector relies heavily on economic policies. In the strategic context of sustainable development, it possesses profound theoretical and practical values to objectively and quantitatively explore the influences of economic policies on the new energy firms’ performance. This paper proposes three hypotheses after conducting a theoretical analysis. This paper regards China’s economic policy uncertainty index (EPU) as a policy shock indicator and utilizes the panel data of listed firms in China’s new energy sector from 2008 to 2021 to explore the influence of EPU on China’s new energy enterprises’ performance. The research results show that EPU exerts a negative influence on the performance of new energy companies, and this negative impact is robust after the replacement of the explanatory variables. On this basis, we further investigate the influence of EPU on the new energy enterprises’ performance in different ownership systems and different regions. It also shows that the impact of economic uncertainty is more obvious on non-state-owned enterprises and the western and central regions. Finally, countermeasures are proposed based on the study results.