Effects of country risks and government subsidies on renewable energy firms’ performance: Evidence from China

Using a panel of 199 Chinese listed renewable energy firms from 2001 to 2018, this study is the first to empirically explore the relationship between country risks and renewable energy firms' performance, and the moderating effect of government subsidies on this relationship, which fills the gap in the literature on performance–risk–subsidy nexus. The results reveal that firm performance increases as economic and financial risks decrease, and it declines as political and composite risks decrease. Subsidies have a negative moderating effect on the relationship between country risks and renewable energy firms’ performance. Further, the relationships among country risks, subsidies, and firm performance are different for state-owned renewable energy firms and private-owned renewable energy firms, and the performance of private-owned firms is more sensitive to country risks than is the performance of state-owned firms. Therefore, when formulating economic policies for renewable energy firms, the Chinese government should consider the interaction effects of country risks and government subsidies on firm performance, and the different effects of country risks and government subsidies on firms with different ownership attributes.