Oil price uncertainty and enterprise total factor productivity: Evidence from China

Xiaohang Ren, Ziqing Liu, Chenglu Jin and Ruya Lin

International Review of Economics & Finance, 2023, vol. 83, issue C, 201-218

Abstract: Global oil price uncertainty may affect the enterprise total factor productivity (TFP). Considering the unbalanced relationship between the rapid growth in the Chinese economy and its relatively low TFP and China is the largest net oil importer, this paper employs the SYS-GMM to effectively analyze the impact of oil price uncertainty on Chinese enterprise TFP, as well as its mechanism. Based on firm-level data of listed Chinese enterprises from 2010 to 2019, we find significant evidence that oil price shocks have a detrimental influence on enterprise TFP. This influence is mediated by technical innovation and resource allocation. Heterogeneity analysis reveals that oil price uncertainty has a stronger negative impact on enterprise TFP state-owned firms, or firms in small businesses, secondary industries, northeastern heavy industries, low-competition sectors, and regions where marketization is sluggish. Moreover, when the control of retail oil prices is eased, the negative impact becomes more evident. Our findings can provide advice on policies or to researchers regarding the considerable uncertainty of energy prices and increasingly importance of TFP.

Keywords: Oil price uncertainty; Total factor productivity; Technological innovation; Resource allocation; SYS-GMM (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056022002222
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:reveco:v:83:y:2023:i:c:p:201-218

DOI: 10.1016/j.iref.2022.08.024

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().