A Study On Financing Efficiency Of New Energy Industry In China

The development of new energy industry has strategic significance for China’s energy structure adjustment, energy security, and the improvement of overall national strength. However, under the rapid development of the new energy industry, capital shortage has become a big problem which constrained the sustainable development of the industry. The root cause of capital shortage problem is indeed the problem of financing efficacy. So this paper mainly studies the financing efficiency of China’s new energy industry in order to solve the difficulty of financing. In this study we choose the four sub-industries including photovoltaic industry, wind industry, bio-energy industry, and nuclear energy industry as our study objects since they has experienced the rapid development.This paper firstly introduces the Capital Structure Theory so as to provide theoretical foundation for the following study. Then it takes a theoretical study on the risk characteristics and the financial structure of China’s new energy industry. As well as the industrial policy and the finance market system which both play a vital role ensuring rapid development of China’s new energy industry. Based on the foregoing study, the paper figures out the macroscopic and microscopic influences of enterprise financing efficiency. According to the analysis of these influence factors the paper calculates the financing efficiency value by using the basic DEA model. Then the paper conducts the second-stage research on the relationship between the influences factors and the FE value with a multiple regression model. At last, the paper proposes the policy recommendations for improving the financial efficiency.This paper concludes that under the current situation of the unbalanced development of the industry, as well as lack of policy and financing support, the financing efficiency is still low when compared with the development speed. Most of the enterprises are in the condition of scale increasing returns condition which indicates that they are still stuck in the financing problem. What’s more the paper figures out that there are great differences among the four sub-industries when compared with their FE value and trend. And the analysis of the influence factors also indicates that reasonable assets size and Debt-to-assets ratio along with higher current debt ratio can lead to higher financing efficiency. Finally, based on the results of the whole study, the paper provides some commendations of improving financing structure and financing efficiency for the government, the financial institutions and the enterprises.