The Internationalization-Performance Relationship of Small-and-Medium-sized Enterprises: The Case of Taiwan’s ESCO Industry

Abstract

We analyze the international output patterns with Taiwan’s energy service companies (ESCOs) investigated in 2016~2019. Due to the finite demand in Taiwan energy-saving market, half of Taiwanese ESCOs develop Asia Pacific markets with international trade, alliance and enterprises group. We derive and confirm some hypotheses about international developing patterns of Taiwanese ESCOs. The First is that those firms with more specific resources will be easier to promote the internationalization of energy-saving businesses. The specific resources are confirmed as firm capital, annual ESCO sales, net income ratio, annual growth rate, energy saving rate. Secondly, if the degree of internationalization of ESCOs is greater, the overall profitability is also relatively higher. The third, the relationship between internationalization and profitability of ESCOs displays a non-linear trend which means when the export ratio is low, the profit from energy service projects increases; however, when the ratio exceeds the optimal point, about 49.584%~54.323%, it will reveals a reversed phenomenon due to high overseas operation costs.

Facilitating ESCO market development through value co-creation: role of utility sector intermediaries

“…Despite the ESCO business model's potential as a workable approach for the decarbonisation of the built environment, the ESCO market is growing at a slow pace across the world in both the public and private sectors (Okay, 2020 ; Recalde, 2021 ; Yeh et al, 2021 ). As reported by the Energy Efficiency Market Reports, global energy efficiency investment across the buildings, transport and industry sectors grew marginally by only 0.6% between 2017 and 2018 (IEA, 2019a ) and is projected to fall by 9% in 2020 due to, among other factors, the COVID-19 pandemic crisis (IEA, 2020 ).…”

“…The business model of energy service companies (ESCOs) has been recognised as a promising delivery mechanism for energy efficiency (Bertoldi & Boza-Kiss, 2017 ; Bertoldi et al, 2006 ; Fang et al, 2012 ; Marino et al, 2010 ; Vine, 2005 ). However, despite its potential, the ESCO market is growing at a slow pace, particularly for private-sector customers (Okay, 2020 ; Recalde, 2021 ; Yeh et al, 2021 ). One mechanism that is receiving increasing attention from academia and policymakers for promoting the development of ESCO markets is the role of intermediary organisations (Bleyl et al, 2013 ; Nolden et al, 2016 ).…”

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