A joint test of policy contagion with application to the solar sector

Cody Yu-Ling Hsiao, Xinyang Wei, Ni Sheng and Chengwu Shao

Renewable and Sustainable Energy Reviews, 2021, vol. 141, issue C

Abstract: This paper examines the impact of China's 2005–2020 solar power energy policies on the stock performance of nine economic sectors in China, Japan, Germany, and the U.S. In order to model how policy shocks affect market performance, we develop a joint contagion test of higher-order co-moments, defining policy contagion as significant changes in the third- and fourth-order co-moments in the post-announcement period as compared to the pre-announcement period. The results show that eight Chinese solar energy policies have significant impacts on nine economic sectors in China, with weaker effects in Germany and the U.S., and the least significance in Japan. Among the eight energy policies, policy supporting plans (i.e., three national five-year plans from 2006 to 2020) provide stronger evidence of contagion to international markets than economic instruments (i.e., feed-in tariffs and subsidies).

Keywords: Contagion test; Solar power; Energy policy; China'S five-year plans (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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DOI: 10.1016/j.rser.2021.110762

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