The limited role of stock market in financing new energy development in China: An investigation using firms’ high-frequency data

Abstract

China has set ambitious goals to peak carbon emissions by 2030 and to achieve carbon neutrality by 2060, which will inevitably accelerate the transition from conventional fossil energy to new energy. However, the financing problem may be a major concern for the development of new energy. In this study, by employing the asymmetric spillover measurement, the financing performance of new energy stock market in China is investigated. Specifically, 5-minute intraday high-frequency data of 66 listed firms, selected to represent the field, are used. The new energy stocks are also divided into six categories, including photovoltaic power, nuclear power, new energy vehicles, lithium batteries, wind power, and new energy equipment and materials. The results suggest that the new energy stock market in China is much riskier than the large cap stock market. The investors in this stock market are sensitive to negative news and tend to be speculative in short-term, rather than to focus on the development of new energy sector in the long run. Policy implications and suggestions are thereupon derived for different types of stakeholders.