Embracing uncertain times: An energy security perspective

Lei Fang, Chin-Hsien Yu, Xinghao Li and Jyun-You Chiang

Energy Economics, 2025, vol. 144, issue C

Abstract: Energy is a substantial driving force in promoting social development. However, the current energy crisis has raised concerns about energy security. Based on provincial data from China from 2011 to 2020, a regional energy security index (ESI) is constructed and the relationship between energy security and foreign direct investment (FDI) inflows is systematically examined. We find that foreign investors tend to consider energy-related factors when choosing investment locations, suggesting that a higher regional ESI is positively correlated with FDI inflows. Further analysis using quantile regression reveals that fortifying energy security is particularly beneficial for provinces with moderate FDI inflows. In the heterogeneity analysis, we find that energy security has more pronounced effects in regions with higher geopolitical risks, extreme climate risks, and policy uncertainty. Finally, we discuss two policies aimed at promoting the orderly development of renewable energy sources and their role in enhancing energy security.

Keywords: Energy security; FDI; Geopolitical risk; Extreme weather risk; Climate policy uncertainty; Business environment (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988325001586
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:eneeco:v:144:y:2025:i:c:s0140988325001586

DOI: 10.1016/j.eneco.2025.108334

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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