Green energy transition and sustainable development of energy firms: An assessment of renewable energy policy

The development of green energy is an important tool to balance economic growth and environmental protec-tion. Using 27,043 data observations from A-share listed companies on the Shanghai and Shenzhen stock ex-changes in China during 2007-2018, this study examines the relationship between renewable energy policies and total factor productivity of energy firms. Our study shows that renewable energy policies promote the total factor productivity of energy firms and that the promotion effect from policy implementation is somewhat persistent. Our findings are robust to several measures of total factor productivity. Further study suggests that the boosting effect from implementing renewable energy policy may be overshadowed by its effects on resource allocation efficiency and technological innovation. In addition, differences in firms' type, external environment, and geographical location make the impact of renewable energy policies on total factor productivity heterogeneous. For example, renewable energy policies tend to suppress the total factor productivity of state-owned firms, large- scale firms, and firms with high equity concentration