Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238432 
Year of Publication: 
2020
Series/Report no.: 
ADBI Working Paper Series No. 1075
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
Despite the dominant role of hydropower in the global power generation mix and the popularity of studying the productivity impact of infrastructure investment, there is a lack of research regarding the impact of hydropower projects on firm productivity. Such a positive impact could promote a more ambitious action plan for mitigating carbon emissions. This study investigates whether and how the People's Republic of China's Three Gorges Project (TGP), the world's largest hydropower project, might affect the productivity of manufacturing firms in the province where the project is located. The empirical results statistically and economically reveal the significant positive impact of the TGP on manufacturing firms' productivity, and various robustness checks confirm the soundness of our findings. We also verify the three channels, the capital deepening effect, the scale effect, and the competition effect, robustly. This productivity impact reveals that hydropower projects have one economic benefit in addition to the other well-known ones, such as flood control and an improvement of the shipping capacity. The findings imply that policy makers need to consider the broad benefits of green renewable energy beyond the conventional cost-benefit trade-off and could implement many green energy projects and technology that marginally fail to pass the cost-benefit analysis.
Subjects: 
infrastructure investment
productivity
DID
Three Gorges Project
hydropower
JEL: 
C33
D24
O18
Q56
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.