Impacts of wind power policies on the total factor productivity of the Chinese wind power industry

Abstract

Wind power has been treated as a strategic choice to decarbonize the Chinese electricity market, so the Chinese government has introduced various policies to improve the wind power industry's total factor productivity (TFP). However, the impacts of policies and their mixes on TFP are still unclear. In addition, the Chinese wind power industry is supervised and regulated by several agencies, so assessing and comparing the effectiveness of policies from different agencies is also an urgent task. This study evaluates the impacts of different categories of policies and their mixes on the TFP of the Chinese wind power industry based on micro-data from the listed Chinese wind power enterprises from 2006 to 2020. The heterogeneity in policy effectiveness is probed with respect to the policy-issuing agencies. The empirical results indicate that economic, regulatory, and soft policies and their mixes significantly facilitate the TFP. Further analysis suggests that the policies of the National People's Congress and the State Council have no significant effect, while the policies of the State Council's departments can significantly improve the TFP of the wind power industry in China.