International oil price uncertainty and corporate investment: Evidence from China's emerging and transition economy

Yong Wang, Erwei Xiang, Adrian Cheung, Wenjuan Ruan, Wei Hu

Research output: Contribution to journalArticle

22 Citations (Scopus)

Abstract

We develop and estimate a dynamic model of investment to investigate the impact of international oil price uncertainty on corporate investment expenditures in China's emerging and transition economy. We further examine whether state ownership affects the relationship between oil price uncertainty and corporate investment. Consistent with the model's prediction, the main finding is that oil price uncertainty exerts a negative impact on corporate investment expenditures. In addition, compared with state-owned listed companies, the negative influence of oil price uncertainty on corporate investment is more significant for non-state-owned listed companies. Our further analysis, using the market-oriented reform of refined oil pricing in 2008 as a quasi-natural event, shows the variation between the low-degree marketization period and the high-degree one in terms of the relationship between international oil price uncertainty, state ownership and corporate investment expenditures.

Original languageEnglish
Pages (from-to)330-339
Number of pages10
JournalEnergy Economics
Volume61
DOIs
Publication statusPublished - 2017

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