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The changing trend of China's power project investment value An empirical study based on panel data model

The changing trend of China's power project investment value An empirical study based on panel... Purpose – The purpose of this paper is to analyze the changing trend of China's power project investment value. Design/methodology/approach – The authors research the profitability of different power projects in recent years and summarize the reason why investment value varies between different power projects. To achieve this, the empirical study developed a fixed effect model in panel data analysis to investigate the impacts that different power projects made to company value. The data were collected from annual financial reports of 30 Chinese power listed companies from 2007 to 2011. Findings – This paper indicates three changes in investment value of China's electricity industry: the electricity industry in China is of investment prospects; the investment value of fuel power projects in China is less and less; and projects around electric power load center are more preferable than those built in other areas. It suggests that it is the resource factors, environment factors, investment policies and conditions, not the power unit itself, that determine the investment value of different power projects in China. Originality/value – This paper analyzes the formation reason of current power investment situation combining China's actual conditions. This study fulfils an identified need to research the changing trend of China's power project investment value and generalize the influencing factors of investment value. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Nankai Business Review International Emerald Publishing

The changing trend of China's power project investment value An empirical study based on panel data model

Nankai Business Review International , Volume 4 (2): 10 – May 31, 2013

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Publisher
Emerald Publishing
Copyright
Copyright © 2013 Emerald Group Publishing Limited. All rights reserved.
ISSN
2040-8749
DOI
10.1108/20408741311323353
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to analyze the changing trend of China's power project investment value. Design/methodology/approach – The authors research the profitability of different power projects in recent years and summarize the reason why investment value varies between different power projects. To achieve this, the empirical study developed a fixed effect model in panel data analysis to investigate the impacts that different power projects made to company value. The data were collected from annual financial reports of 30 Chinese power listed companies from 2007 to 2011. Findings – This paper indicates three changes in investment value of China's electricity industry: the electricity industry in China is of investment prospects; the investment value of fuel power projects in China is less and less; and projects around electric power load center are more preferable than those built in other areas. It suggests that it is the resource factors, environment factors, investment policies and conditions, not the power unit itself, that determine the investment value of different power projects in China. Originality/value – This paper analyzes the formation reason of current power investment situation combining China's actual conditions. This study fulfils an identified need to research the changing trend of China's power project investment value and generalize the influencing factors of investment value.

Journal

Nankai Business Review InternationalEmerald Publishing

Published: May 31, 2013

Keywords: China; Electricity industry; Electric power generation; Government policy; Investment value; Chinese power listed company; Power project; Panel data; Fixed effect model

References