The influences of fiscal and credit policies on renewable energy enterprises' investment in China

Abstract

This article explores the transmission effects of fiscal and credit policies on investment by renewable energy enterprises using a generalized method of moments model applied to enterprise-level panel data. Our empirical results demonstrate that subsidies and taxation rebates received from central and local governments have significantly positive impacts on renewable energy enterprises' investment efficiency. Short-run, long-run, and total credit loans obtained from financial institutions have significantly positive impacts on renewable energy enterprises' investment. Subsidies and credit loans and taxation rebates and credit loans represent significantly positive interactions on renewable energy enterprises' investment. Variations in subsidies, taxation rebates, and credit loans induce interactions to become more sensitive. Overall, the results demonstrate that fiscal and credit policies are able to effectively incentivize renewable energy enterprises to invest in more profitable renewable energy projects and then enhance investments in tangible assets.