Description
This study employs an empirical model that features both choices of electric vehicles (EVS) and production function for multi-product firms to identify the effects of EV purchase subsidy and the introduction of competition on the productivity in China's EV industry. The analysis consists of three main steps. Firstly, I estimate the model using vehicle sales and firm level input information. Second, applying counterfactual analysis, I investigate how EV subsidies affect the productivity of firms in different product categories, focusing on surviving, exiting, and entering products. Third, I investigate whether introduction of competition will result in specific changes in productivity, using Tesla's entry as the example. As Tesla entered the market in 2020, after the subsidy downgrade that occurred before that year, it is crucial to identify the relative importance of the subsidy downgrade versus Tesla's impact on productivity. Lastly, I conduct simulations to assess the overall impact of eliminating tariffs on the market and use it as a benchmark to assess the protective or procompetitive effects of subsidy and competition on firms' productivities. This study aims to provide insights into the complex dynamics of productivity changes in China's EV market, considering both policy-related factors and the entry of a major player like Tesla.| Period | 19 Apr 2024 |
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| Event title | ECON Topic Defence Seminars |
| Event type | Seminar |
| Organiser | Department of Economics |
| Location | Hong Kong, Hong KongShow on map |