Climate policy risk cascades in China's electrochemical energy storage chain: Evidence from spatiotemporal spillover
Document Type
Research-Article
Journal Name
International Review of Financial Analysis
Keywords
Climate policy uncertainty, Climate transition risk, Electrochemical energy storage, Ripple-spread network model, Spillover effects
Abstract
This study examines the directional connectedness from Chinese climate policy uncertainty (CCPU) to climate transition risk in the electrochemical energy storage industry. Using time-varying parameter vector autoregression with Baruník–Křehlík frequency connectedness and ripple spread network models, we find that the short-term spillover effect is the main channel through which CCPU shocks propagate. In contrast, medium- and long-term effects play a comparatively minor role. The upstream raw materials (RAW) sector, downstream applications (APP) sector, and midstream power conversion systems receive the strongest spillovers; the RAW sector is the most vulnerable node, while APPs act as risk amplifiers. Feasible generalized least squares results show that firm profitability, operating history, innovation capacity, and carbon emissions significantly shape the speed and scope of CCPU propagation. These findings identify critical transmission pathways and firm-level drivers, providing insights to enhance industry resilience amid policy uncertainty. © 2026 Elsevier Inc.