Ultra-High Voltage Transmission and Corporate Operational Risk: Evidence from China

Han Sun; Jae Ho Lee; Hyoung Goo Kang; Guodong Zhang

doi:10.22794/keer.2025.24.2.007

All Issue

2025 Vol.24, Issue 2 Preview Page Next Page

Research Article

Ultra-High Voltage Transmission and Corporate Operational Risk: Evidence from China 초고압 송전망과 기업의 운영 리스크: 초고압 전력망의 경제적 효과

30 September 2025. pp. 223-253

PDF XML

Abstract

This study investigates the causal impact of China’s Ultra-High Voltage (UHV) transmission infrastructure on corporate operational risk. As a cornerstone of the national energy strategy, the UHV grid enables the efficient transfer of electricity from resource-rich western regions to industrialized eastern provinces, fundamentally reshaping the energy landscape for firms. Leveraging the staggered rollout of UHV projects from 2007 to 2016 as a quasi-natural experiment, we employ a robust Difference-in-Differences framework using the Callaway and Sant’Anna (2020) estimator to identify the dynamic treatment effects. The analysis reveals that UHV commissioning significantly reduces firms’ operational risk, measured by the volatility of Return on Assets (ROA), with the effect growing in magnitude over time. Mechanism analyses suggest that this reduction is partially mediated by increased green innovation and enhanced financial flexibility. The heterogeneity analysis indicates that the effect is stronger for non-state-owned enterprises, firms in energy-intensive industries, and those located in power-receiving provinces. These findings highlight the firm-level benefits of large-scale public infrastructure and offer valuable implications for policymakers, managers, and investors regarding the strategic importance of energy stability. The study contributes to the literature by connecting macro-level infrastructure policy with micro-level corporate risk and innovation outcomes.

Keywords

Ultra-High Voltage (UHV) Transmission

Operational Risk

Difference-in-Differences (DID)

Green Innovation

Energy Infrastructure

본 연구는 중국의 초고압(UHV) 송전 인프라가 기업의 운영 리스크에 미치는 인과적 영향을 실증적으로 분석한다. UHV 전력망은 자원이 풍부한 서부 지역의 전력을 산업화된 동부 연안으로 효율적으로 전달함으로써, 기업의 에너지 환경을 근본적으로 변화시키는 국가 전략 핵심 사업이다. 본 연구는 2007년부터 2016년까지의 시차를 두고 단계적으로 구축된 UHV 프로젝트를 준자연실험(quasi-natural experiment)으로 활용하며, Callaway and Sant’Anna(2020)의 추정 방법을 적용한 차분의 차분(DID) 분석을 통해 인과 효과를 식별한다. 분석 결과, UHV 라인의 준공은 기업의 자산수익률(ROA) 변동성으로 측정한 운영 리스크를 통계적 및 경제적으로 유의하게 감소시키며, 이 효과는 시간이 지남에 따라 점진적으로 확대되는 것으로 나타났다. 메커니즘 분석을 통해 이러한 리스크 감소는 기업의 녹색 혁신 활동 증가 및 재무적 유연성 제고에 의해 부분적으로 매개됨을 확인하였다. 이 효과는 비국유기업, 에너지 집약 산업군, 그리고 전력 수입 지역에 위치한 기업에서 특히 강하게 나타난다. 본 연구는 대규모 공공 인프라 투자에 따른 긍정적 외부효과를 기업 수준에서 정량적으로 규명하며, 에너지 인프라 안정성이 기업 리스크와 혁신 활동에 미치는 구조적 영향을 조명함으로써 정책결정자, 기업 경영진, 투자자에게 유의미한 시사점을 제공한다.

키워드

초고압(UHV) 송전

운영 리스크

차분의 차분(DID)

녹색 혁신

에너지 인프라

References

Altaf, K., Ayub, H., Shabbir, M. S., Usman, M. (2022). Do operational risk and corporate governance affect the banking industry of Pakistan?. Review of Economics and Political Science, 7(2), 108-123.

10.1108/REPS-12-2019-0156

Callaway, B., Sant’Anna, P. H. C. (2021). Difference-in-differences with multiple time periods. Journal of Econometrics, 225(2), 200-230.

10.1016/j.jeconom.2020.12.001

Chen, A., Chen, H. (2021). Decomposition analysis of green technology innovation from green patents in China. Mathematical Problems in Engineering, 2021(1), 6672656.

10.1155/2021/6672656

Chi, Y., Qiao, Z., Zhou, W., Zhang, M., Zhang, X. (2023). The impact of ultra-high voltage projects on carbon emissions in China. Environmental Science and Pollution Research, 30(40), 92135-92145.

10.1007/s11356-023-28565-y

CnOpenData. (n.d.) Chinese green patent volume data by region. https://www.cnopendata.com/en/data/m/ESG/chinese-green-patent-volume-data-by-region.html

Deng, M., Fang, X., Lyu, Q., Luo, W. (2023). How does corporate financialization affect operational risk? Evidence from Chinese listed companies. Economic Research-Ekonomska Istraživanja, 36(3), 1-21.

10.1080/1331677X.2023.2165526

Gao, Z., Zhao, L. (2025). Health impacts of cross-regional transmission infrastructure: Evidence from China’s ultra-high voltage projects. Energy Economics, 108669.

10.1016/j.eneco.2025.108669

Goodman-Bacon, A. (2021). Difference-in-differences with variation in treatment timing. Journal of Econometrics, 225(2), 254-277.

10.1016/j.jeconom.2021.03.014

Hodder, L., Hopkins, P., Wahlen, J. (2006). Risk-relevance of fair-value income measures for commercial banks. The Accounting Review, 81(2), 337-375.

10.2308/accr.2006.81.2.337

Min, T., Wang, D. (2025). The impact of energy infrastructure on corporate upgrading and transformation. Applied Economics, 1-17.

10.1080/00036846.2025.2497558

Moosa, I. A. (2007). Operational Risk Management. New York: Palgrave Macmillan.

10.1057/9780230591486

Ren, S., Bao, R., Gao, Z. (2025). Arrival of distant power: The impact of ultra-high voltage transmission projects on energy structure in China. Energy, 316, 133718.

10.1016/j.energy.2025.134527

Sun, C., Min, J. (2024). Dynamic trends and regional differences of economic effects of ultra-high-voltage transmission projects. Energy Economics, 138, 107871.

10.1016/j.eneco.2024.107871

Sun, L., Abraham, S. (2021). Estimating dynamic treatment effects in event studies with heterogeneous treatment effects. Journal of Econometrics, 225(2), 175-199.

10.1016/j.jeconom.2020.09.006

Wang, Y., Zhen, J., Pan, H. (2024). Ultra-high-voltage construction projects and total factor energy efficiency: Empirical evidence on cross-regional power dispatch in China. Sustainability, 16(18), 8083.

10.3390/su16188083

Information

Publisher :Korea Energy Economic Institute·Korea Resource Economics Association
Publisher(Ko) :에너지경제연구원·한국자원경제학회
Journal Title :Korean Energy Economic Review
Journal Title(Ko) :에너지경제연구
Volume : 24
No :2
Pages :223-253
Received Date : 2025-07-18
Revised Date : 2025-08-31
Accepted Date : 2025-09-09
DOI :https://doi.org/10.22794/keer.2025.24.2.007

Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

All Issue