Associate Professor Xiaohang Ren, a researcher of the Base, has published a collaborative paper titled "Weathering the policy storm: How climate strategy volatility shapes corporate total factor productivity" in Energy Economics.

Energy Economics is a top professional journal in the field of energy economics and energy finance. Its themes include but are not limited to energy exploitation, conversion and use, energy commodities and derivatives market, regulation and taxation, forecasting, environment and climate, international trade, development and monetary policy.

Abstract: Changes in climate policies have become a critical consideration for businesses, necessitating strategic adaptation and innovation in the face of evolving regulations to achieve long-term success. This study investigates the impact of climate policy uncertainty (CPU) on firm-level total factor productivity (TFP) using a dataset comprising 5954 North American listed companies from 2000 to 2019. Our findings demonstrate a significant negative relationship between CPU and firms' TFP. Particularly, firms operating in the secondary sector, with higher credit ratings, smaller Tobin's Q, and greater profitability, experience more significant negative effects from CPU. The mechanisms through which CPU operates include cost escalation, reduced turnover, and constrained investment. Employing the Local Projection Instrumental Variable (LP-IV) method, we observe that the relationship between CPU shocks and firm-level TFP is time-varying. The adverse effect of CPU on TFP is most severe in the third year following the occurrence of the shock. To mitigate the negative consequences, governments should enhance the continuity and foresight of climate policies, while firms need to effectively identify and manage climate risks to bolster their resilience in the face of uncertainty.

Keywords: Climate policy uncertainty, Total factor productivity, Heterogeneous impacts, Influence mechanism

Link：https://doi.org/10.1016/j.eneco.2024.107553

Teacher profile

Xiaohang Ren is a specially appointed associate professor at the Business School of Central South University, a highly cited Chinese scholar of Elsevier, and a top 2% scientist in the world. He mainly focuses on research in energy finance, financial risks, and financial measurement. He has published more than 100 papers in authoritative domestic and foreign journals such as Journal of the American Statistical Association, Transportation Research Part A, Energy Economics, Quantitative Finance, Review of Quantitative Finance and Accounting, International Review of Financial Analysis, Technological Forecasting and Social Change, Business Strategy and the Environment, Pacific-Basin Finance Journal, Applied Energy, Resources Policy, Renewable & Sustainable Energy Review, Energy, Journal of Management Sciences in China (English Edition), Systems Engineering - Theory & Practice, and Chinese Journal of Management Science. Among them, more than 30 papers are ESI hot articles or highly cited papers. He serves as the lead editor of Sustainable Communities (Taylor & Francis), associate editor of Humanities & Social Sciences Communications (the only social science and humanities journal affiliated with Nature), and guest editor of SSCI journals such as Climate Change Economics, Economic Change and Restructuring.