The profitability of electricity generating firms and policies promoting renewable energy

Jaraitė, Jūratė; Kažukauskas, Andrius

doi:10.1016/j.eneco.2013.10.001

Cited by 41 publications

(40 citation statements)

References 28 publications

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“…Moreover, Oberndorfer (2009) found that although EUA price variations and stock returns of the most important European electricity corporations were positively related, Spanish electricity corporations exhibit a significantly (but small as far as the size of the estimated coefficient is concerned) negative relationship. Jaraitė and Kažukauskas (2013) found that the first years of the EU ETS (2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010) could not be associated with excess profits for electricity producers.…”

Section: Cointegration Relationshipsmentioning

confidence: 99%

Firm-specific impacts of CO2 prices on the stock market value of the Spanish power industry

2016

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EU ETS impacts on stock market returns of Spanish power sector. Long-run positive effect of EU ETS on market returns is found only in Phase II. No short-run effects were found. EUA price effect is company-specific. a r t i c l e i n f o b s t r a c tEuropean Union carbon emissions allowances (EUA) price fluctuations can affect electricity companies' stock market values as these oscillations may change firms' profitability and thus investors' decisions. This outcome can differ not only contingent on the EU ETS Phase, but also on firms' generation mix. Moreover, stock markets may react differently to EUA increases in comparison to decreases, thus asymmetrically.By using daily data from January 2008 to July 2014, this article analyses long-run equilibrium relations and short-run interactions between the aggregated electricity industry stock market returns and EUA price changes. Moreover, we test if the relationship between EUA price variations and electricity stock returns is asymmetric and if the carbon price effect and the asymmetry are power firm-specific.Adding to earlier studies, we initially provide an inspection of the individual impact of EU ETS Phase II and on-going Phase III; followed by a comparative analysis between power firms which core activity relies on renewable energy sources and those whose sources are fundamentally non-renewable ones.A statistically significant positive long-run impact of EU ETS on the aggregated power sector stock market return is found concerning Phase II and works asymmetrically. Moreover, evidence is provided demonstrating that asymmetry and EUA effects are power firm-specific.

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Section: Cointegration Relationshipsmentioning

confidence: 99%

Firm-specific impacts of CO2 prices on the stock market value of the Spanish power industry

2016

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“…Despite the fact that firms are the direct beneficiaries of public policy support, the existing literature has explored these relationships primarily at the industry and multi-country levels, and not at the firm and single-country levels. There have been academic efforts to investigate the effects of public policies on firms' financial performance [1][2][3] and exports [4]. However, apart from research on China, relatively less attention has been paid to analyses at both the firm and single-country levels in a longitudinal context.…”

Section: Introductionmentioning

confidence: 99%

“…Taking into account firm heterogeneity and the fact that the amount of public policy support each firm receives changes over time, this study empirically tests the nexus between public policy support and firms' financial performance in a longitudinal context taking a systematic approach. For the literature on performance at the firm level, Jaraité and Kažukauskas [1], Zhang et al [2], and Zhang et al [3] test the effects of government policy on performance in a longitudinal context employing a panel approach. Nonetheless, no studies have analyzed the panel data systematically.…”

Section: Introductionmentioning

confidence: 99%

Exploring the Effects of Government Policies on Economic Performance: Evidence Using Panel Data for Korean Renewable Energy Technology Firms

2019

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Previous studies have investigated how government policies on renewable energy technology (RET) affect economic performance at the industrial level. However, each firm in the RET industry is heterogeneous in terms of their capacities, resources, and the amount of public subsidies they receive. Considering the context in which public subsidies are provided to firms, this study econometrically investigates the effects of government policies on firms’ financial performance using panel data from the Korean RET industry. We consider the results of various panel framework tests; establish a panel vector autoregressive model in first differences; and test the dynamic relationships between firms’ financial performance, government subsidies (R&D- and non-R&D-related), firm size and age, and organizational slack, using a bias-corrected least squares dummy variable estimator. We find that R&D- and non-R&D-related subsidies positively affect firms’ financial performance in the long run. In the short run, there are bidirectional positive causal relationships between firms’ financial performance and organizational slack (and non-R&D-related subsidy), and firm size and non-R&D-related subsidy. A positive short-run relationship runs from R&D-related subsidy to firms’ financial performance, from firm age to non-R&D-related subsidy, and from firm size to firm age. Further, there are dynamic effects in all estimations, demonstrating that the dependent variables of the previous period enhance their values in the current period. The results provide some policy and strategic implications.

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“…Nevertheless, when putting the results of these studies into perspective policymakers should consider that researchers take various analysis criteria for assessing the performance of policy instruments. For example, thus far, several studies have concurrently analyzed the performance of price-based and quantity-based schemes, to explore which scheme derives better outcomes (e.g., Agnolucci, 2007;De Jonghe et al, 2009;Finon and Perez, 2007;Jaraitė and Kažukauskas, 2013;Johnstone et al, 2010;Ringel, 2006;Verbruggen and Lauber, 2012). The answer varies, but often connotes 'it depends' (IPCC, 2011a).…”

Section: Discussionmentioning

confidence: 99%

“…This criterion has had a considerably large impact on forthcoming studies, with a citation record of 27.32 per paper. With this criterion, studies frequently assess the performance of TGC systems in comparison to FIT (e.g., Agnolucci, 2007;De Jonghe et al, 2009;Finon and Perez, 2007;Jaraitė and Kažukauskas, 2013;Johnstone et al, 2010;Ringel, 2006;Verbruggen and Lauber, 2012). Whereas neither TGC nor FIT offers the optimal solution (Finon and Perez, 2007), the FIT framework is often considered a more effective policy instrument in driving RES-E investment (Alishahi et al, 2011;Fouquet and Johansson, 2008;Haas et al, 2011b;Toke and Lauber, 2007).…”

Section: Findings and Empirical Analysis ____________________________mentioning

confidence: 99%

Who is in the driver seat? : Evolution of actors in the renewable electricity industry

Darmani¹

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The profitability of electricity generating firms and policies promoting renewable energy

Cited by 41 publications

References 28 publications

Firm-specific impacts of CO2 prices on the stock market value of the Spanish power industry

Firm-specific impacts of CO2 prices on the stock market value of the Spanish power industry

Exploring the Effects of Government Policies on Economic Performance: Evidence Using Panel Data for Korean Renewable Energy Technology Firms

Who is in the driver seat? : Evolution of actors in the renewable electricity industry

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