Does the Photovoltaic poverty alleviation project promote county economic development? : Evidence from 852 counties in China

Photovoltaic poverty alleviation projects (PVPA), an innovative and unique policy introduced by China to promote green development and poverty alleviation, has attracted growing attention from both the public and the government. However, there is no consistent conclusion in the existing literature on the question of whether the establishment of PVPA has promoted county economic development. Based on the panel data of 852 counties from 12 provinces in China, this study employs the quasi-experimental method of Difference in Difference with Propensity Score Matching (PSM-DID) to examine the effects of the establishment of PVPA on county economy. It is found that: (1) The introduction of PVPA can significantly and sustainably promote the county economy; the longer the PVPA is introduced, the greater the boost to economic development. These results have been verified by robustness testing. (2) The policy effects of PVPA show heterogeneity in different types of counties. Specifically, the policy effects are stronger in non-national-level poor counties than in national-level poor counties, while the positive policy effects are more prominent in western counties than in non-western counties. (3) The policy effects of PVPA have positive but weak spillover effects on the neighboring areas. Based on the above findings, suggestions are proposed, such as sustainable operation of PVPA through multiple channels and enhanced cooperation of photovoltaic projects between neighboring regions are proposed.