How does energy finance promote energy transition? Evidence from Shanghai crude oil futures

Houyin Long, Xiang Huang and Jiaxin Wang

International Review of Financial Analysis, 2023, vol. 90, issue C

Abstract: We examine the energy transition effect of Shanghai crude oil futures (SC). Using Chinese renewable energy firm-level data between 2014q1 and 2021q3, we show that SC can alleviate the inhibitory effect of global oil price fluctuations on energy transition. We further explore three potential underlying mechanisms through which the energy transition effect of SC: reducing the impact of global oil price volatility on firms' business risk, financialized investment, and debt cost. We find the energy transition effect of SC is more pronounced in samples with low-risk resistance. Our paper sheds new light on the real effects of SC on energy transition.

Keywords: Shanghai crude oil futures (SC); Global oil price volatility; Renewable energy investment (search for similar items in EconPapers)
JEL-codes: G31 O13 O16 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923003939

DOI: 10.1016/j.irfa.2023.102877

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