Sustainability of renewable energy in China: Enhanced strategic investment and displaced R&D expenditure

Tackling climate change renders advancing the renewable energy sector exceptionally crucial. As the industry leader, China has achieved remarkable success but also faced concerns that necessitates re-examining the sustainability of its development. Focusing on the strategic development planning of renewable energy enterprises, the present study delves into the phenomenon of strategic investment crowding out R&D expenditure.1 The analysis results of data structure alleviate the concerns about the possibility of discretionary decisions due to the unique policy and financing background of Chinese enterprises. Furthermore, leveraging the industry's unique instrumental variable and considering the sequential allocation of funds, the underlying mechanism behind the crowding-out effect is elucidated. The analysis and policy recommendations presented herein serve as a valuable reference for governments to scientifically and prudently formulate development plans for the renewable energy industry.