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Can waste resource policies boost earnings of green concept stocks? Evidence from waste-to-energy technology
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DOI：10.1007/s10098-026-03551-3.png)
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Abstract
En 中文
Waste incineration serves as a crucial mechanism for converting solid waste into power in China. This study pioneers the investigation of how waste resource policy implementation immediately affects stock returns in the waste-to-energy generation sector. While these policies aim to promote technological advancement, they could reduce profits through increased input costs. We employ the Fama–French three-factor model to evaluate green concept stock returns. To analyze the impact of the Construction Work Plan of the Biomass Power Generation Project in 2021, we utilize a combined methodology of propensity score matching and difference in difference. Our findings reveal that the implementation of the Project has a modest negative effect (− 0.49%) on related green concept stock returns within a 13-month event window. Further analysis indicates that the policy’s negative short-term impacts on stock markets outweigh its positive effects. This phenomenon is associated with three factors: intensifying competition, policy uncertainty stem from waste incineration’s position in the waste hierarchy, and reducing short-term dividend as companies expand production. This research highlights the importance of considering short-term factors when assessing the financial market implications of waste resource policies. We conclude that policymakers should design supporting measures to mitigate short-term market impacts while maintaining sustainable environmental objectives.
Keywords:
Waste resource policy
Waste-to-energy technology
Green concept stocks
Fama–French three-factor model
PSM-DID method
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