What is it about?
Solar photovoltaics (PV) industry is indeed a policy-driven business in China. This is particularly the case in China, where supply side aid takes the forms of free or low-cost loans, artificially cheap raw materials, components, energy, and land and support for R&D and technology acquisitions from the Government. We analyzed its actual impact on the market efficiency arising from this.
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Why is it important?
Our results focusing on companies listed on the public stock exchanges in China suggest that supply side financial aid can certainly help create economies of scale for them, but we find that this barely help with the technology efficiency. In the long run, financial aid leads to diseconomies of scale. This has important implications for the solar panel companies operating in the global space.
Perspectives
Adrian T H Kuah read his PhD from Manchester, ITP from Bocconi, and MBA from Strathclyde. He published more than 58 papers, with his work appearing in prestigious outlets such as the Oxford University Press, Thunderbird International Business Review, European Journal of Marketing and R&D Management. In 2013, he was named by the UK Financial Times as Professor of the Week.
Adrian T. H. Kuah
James Cook University
Read the Original
This page is a summary of: Can a Fast-Expanding Market Sustain with Supply-Side Government Aid? An Investigation into the Chinese Solar Photovoltaics Industry, Thunderbird International Business Review, December 2015, Wiley,
DOI: 10.1002/tie.21771.
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