Horizontal or vertical spillover: A study on the risk propagation mechanism of China's renewable energy industry chain

Jing Liu and Jun Zhang

Renewable Energy, 2025, vol. 249, issue C

Abstract: This paper focuses on the China's renewable energy industry chain, employing the dynamic spillover index decomposition method to investigate the risk spillover effects within this chain. Innovatively, the total spillover effect is decomposed into horizontal spillover and vertical spillover. The empirical results reveal the following: First, significant risk linkage exists within China's renewable energy industry chain, with the main sources of risk contagion originating from the downstream segments. Second, vertical spillovers in the renewable energy industry chain are stronger than horizontal ones. In terms of industry segments, horizontal spillovers dominate in the upstream sector, while vertical spillovers are stronger in the downstream sector. Third, as the renewable energy industry matures and market mechanisms improve, there has been a notable shift in the risk propagation mechanism in China's renewable energy industry chain—from a dominance of vertical spillover to horizontal spillover. Fourth, compared to horizontal spillovers, vertical spillovers in the renewable energy industry chain have a more significant impact on the resilience of the chain. These findings are crucial for policymakers and stakeholders, offering insights into risk propagation in the renewable energy chain and guiding strategies for enhancing industry resilience.

Keywords: Renewable energy; Industry chain resilience; Horizontal spillover; Vertical spillover (search for similar items in EconPapers)
JEL-codes: C58 G12 Q54 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148125009462
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:249:y:2025:i:c:s0960148125009462

DOI: 10.1016/j.renene.2025.123284

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

More articles in Renewable Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().