Title: Indirect Network Effects and Policy Implications: Empirical Analysis of the Chinese Electric Vehicle Market
Speaker：Junji Xiao, Lingnan University
Time: 10:00 - 11:30, August 25 (Beijing Time)
Mode：Hybrid
Venue：Room 106, Zhonghui Building
Zoom ID：2778794788
Password：201512
About the Speaker:
Junji Xiao has been an associate professor in economics at Lingnan University since 2021. He is an economist with research interest in the fields of empirical industrial organization, environmental economics and China economy. His recent work has explored such topics as the competition structure, the welfare effect of environmental policies and the vertical restraints. Before joining Lingnan University, he taught at UTS Business School, the Chinese University of Hong Kong, Fudan University and Shanghai University of Finance and Economics respectively. He was awarded the German DFG Fellowship in 2001 and Hong Kong RGC grant in 2016. His research papers have been published in such journals as International Economic Review, Review of Economics and Statistics, Journal of Industrial Economics, Journal of Economics & Management Strategy, Journal of Economic Behavior and Organization, Journal of Environmental Economics and Management, International Journal of Industrial Organization and Journal of Comparative Economics. He has also worked on commissioned projects for the State Administration for Market Regulation, China.
Abstract:
Governments can accelerate technology adoption by directly subsidizing a technology or subsidizing the adoption of its complements when indirect network effects exist. The optimal policy choices depend on the scale of indirect network effects relative to direct policy effects.Using data on electric vehicle (EV) sales and charger numbers in China, this paper estimates the mutual indirect network effects between EV adoption and charging station infrastructure and assesses the effectiveness and efficiency of EV purchase subsidies and charger subsidies on EV adoption. Although the indirect network effect of chargers on EV adoption is significant,our findings suggest that EV purchase subsidies are 34.4% more effective than equally budgeted charger subsidies in promoting EV adoption at a low cost of efficiency loss. Moreover, these two subsidies have different effects on the distributions of EV sales and consumer welfare:the recent changes in EV subsidies favor high-range vehicles and their buyers, while charger subsidies favor low-range vehicles and their buyers.
