Abstract
New energy vehicle (NEV) policies have greatly promoted the growth of the NEV industry in China, while also attracting a lot of investor attention. Using Chinese NEV concept stocks and related industrial policies, including purchase tax incentives (PTI) and promotion and application (P&A) policies, issued from 2011 to 2020 as the research setting, this paper adopts a panel data model to examine the impact of policy announcement on the volatility of NEV concept stocks, as well as the mediating role of investor attention in transmitting the impact. We find that NEV P&A policies have a significant and positive impact on NEV concept stock volatility, while PTI policies do not have a significant impact. Moreover, investor attention plays a partial mediating role in transmitting the impact of P&A policies on NEV stock market by increasing the stock volatility risk. Furthermore, there is heterogeneous effect of equity ownership in the relationship between policy announcement and investor attention on the volatility of NEV concept stocks; non-state-owned firms are more sensitive to the NEV P&A policies than state-owned firms. By analyzing the relationship between policy announcement and concept stock volatility, this paper enriches the research on NEV concept stocks and provides policy implications for the NEV industry.
Highlights
As global warming intensifies, countries have introduced a variety of carbon emission reduction policies to promote sustainable development (Yang et al, 2020)
The results show that the coefficient of acquisition tax incentives (Tep) is positive but not significant, indicating that the acquisition tax incentives does not have an impact on the volatility of New energy vehicle (NEV) concept stocks; the coefficient of promotion and application policy (Pap) is significantly positive at the 1% significance level, which indicates that the promotion and application (P&A) policy has a significant and positive impact on the volatility of NEV concept stocks
We explore the mediating effect of investor attention in the relationship between policy announcement and NEV concept stocks
Summary
Countries have introduced a variety of carbon emission reduction policies to promote sustainable development (Yang et al, 2020). Since there is a lack of comparative research on such policies in prior studies, this paper divides NEV policies into two categories, namely, purchase tax incentives (PTI) and P&A policies, and analyzes their impact on the volatility of related concept stocks. Using China’s concept stock market as the research setting, this paper investigates the impact of new energy policies on new energy-related stock price volatility and explores the potential channels through which policies affect the stock market by analyzing the mediating effect of investor attention. We believe that this will be a promising area for future research that can be extended to other developing-country stock market studies.
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