The Profitability of Electricity, Oil, and Gas Utilities in America

Murillo, John William Rosso; Ramos, Yeny Esperanza Rodriguez

doi:10.18359/rfce.4525

Cited by 3 publications

(1 citation statement)

References 43 publications

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“…David [21] suggests several financial ratios used to evaluate strategies, namely: Return on Investment (ROI), Return on Equity (ROE), Profit Margin, Market Share, Debt to Equity, Earnings per share, Sales growth, and Asset growth. Furthermore, Romero et al [22] said that the company's financial performance was measured using a profitability ratio.…”

Section: Business Performancementioning

confidence: 99%

Does Adapting the Business Environment Have a More Dominant Effect on Business Performance Than Optimizing Company’s Resources?: Strategies to Improve Business Performance

Hidayat¹,

Setiawan²,

Rohman³

et al. 2023

Advances in Economics, Business and Management Research

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Purpose: This study aims to examine during the Covid-19 pandemic situation in the ISP Industry in Indonesia, what is the effect of adapting to changes in the business environment on business performance and the effect of optimizing company resources to business performance, and which ones have a more dominant effect to business performance? Research Design: This study uses a quantitative research approach. Observations were made in a cross-section/oneshot, in 2022. The population of this study was the ISP industry, which amounted to 474 companies, and the unit of observation was the management. Sampling used stratified random sampling. ISPs are grouped based on the size of each company based on the number of customers and branch cities which are divided into 3 groups, namely: small, medium, and large. Samples were taken from as many as 100 respondents. Sampling from each classification is done randomly based on a list of population members. Testing the causality hypothesis in this study used Partial Least Square (PLS). Result: The hypothesis testing shows that both adapting the business environment and optimizing the company's resources have a direct significant effect on business performance. This study shows the results that optimizing a company's resources has a more dominant effect on business performance rather than adapting to changes in the business environment. Despite changes in the business environment, namely the weakening of the economy and the decline in people's purchasing power due to the covid-19 pandemic. Findings: The results of this study provide managerial implications for ISP companies in Indonesia that efforts to improve business performance can be done by optimizing and developing more adequate ownership of the company's resources and following by adapting to changes in the business environment. Optimizing and developing of company's resources needs to be prioritized over intangible resources then tangible resources. Efforts to adapt to the change in the business environment need to be prioritized on the macro-environment first then the micro-environment. On Business Performance, Company needs to prioritize achieving better ROIC, increase market share and asset growth, better ROA, and Ebitda Margin.

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Section: Business Performancementioning

confidence: 99%

Does Adapting the Business Environment Have a More Dominant Effect on Business Performance Than Optimizing Company’s Resources?: Strategies to Improve Business Performance

Hidayat¹,

Setiawan²,

Rohman³

et al. 2023

Advances in Economics, Business and Management Research

View full text Add to dashboard Cite

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The effect of capital ownership on the relationship between the regulatory process and companies' abnormal return

Rufino,

Cavalcante

2024

Rev. contab. finanç.

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The aim of this article was to examine the effect of tariff changes, moderated by capital ownership, on the abnormal return of Brazilian public utility companies. Based on the capture perspective, regulation can be captured by the regulated party, and capital ownership can shape the pressure from companies on the regulator for regulatory decisions that are favorable to their interests. This issue has not yet been investigated. In the regulatory process, the regulator's decisions generally involve increasing the administered price. As a result, the legitimacy of the regulator is questioned, suggesting that its decisions are biased towards the interests of companies. This study sheds light on this issue. The evidence shows how the private identity of the controlling owner can lead the company to earn a return above the cost of capital through the regulatory process. The sample consisted of regulated companies (from the water and sanitation, piped natural gas and electricity sectors) from 2007 to 2019. The variables used were: abnormal return (dependent); tariff change and capital ownership (independent); and leverage, economic growth, size and sector. The data were estimated using a random effects model, generalized least squares and robustness using a dynamic panel with GMM-SYS (all observations). The results show that the private identity of the owner of the capital can lead to regulatory decisions that are more aligned with the interests of maximizing the profitability of the regulated companies. The results are consistent with the perspective of the economic rationality of private investors to maximize returns and the perspective that public investors prioritize other outcomes rather than abnormal returns.

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Efeito da propriedade do capital sobre a relação entre processo regulatório e retorno anormal de empresas

Rufino,

Cavalcante

2024

Rev. contab. finanç.

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Resumo O objetivo deste artigo consistiu em verificar o efeito da mudança tarifária, moderado pela propriedade do capital, no retorno anormal de empresas brasileiras do setor de utilidade pública. Com base na perspectiva da captura, a regulação pode ser capturada pelo regulado, e a propriedade do capital pode modelar a pressão das empresas sobre o regulador por decisões regulatórias favoráveis a seus interesses. Tal indagação ainda não foi investigada. No processo regulatório, as decisões do regulador geralmente envolvem o aumento do preço administrado. Como consequência, a legitimidade do regulador é questionada, sugerindo que suas decisões têm sido tendenciosas aos interesses das empresas. Este estudo coloca luz sobre o tema. As evidências fornecem informação sobre como a identidade privada do proprietário controlador pode levar a empresa a obter retorno superior ao custo do capital por meio do processo regulatório. A amostra foi composta por empresas reguladas (setores de água e saneamento, gás natural canalizado e energia elétrica), no período de 2007 a 2019. As variáveis utilizadas foram: retorno anormal (dependente); mudança tarifária e propriedade do capital (independentes); e alavancagem, crescimento econômico, tamanho e setor. Os dados foram estimados por meio de um modelo de efeitos aleatórios, método dos mínimos quadrados generalizados; e robustez usando painel dinâmico com GMM-SYS (todas as observações). Os resultados apontam que a identidade privada do proprietário do capital pode conduzir a decisões regulatórias mais alinhadas aos interesses de maximização da rentabilidade das empresas reguladas. Os resultados se alinham à perspectiva da racionalidade econômica dos investidores privados à maximização dos retornos e à perspectiva de que os investidores públicos priorizam outros resultados, em vez de retornos anormais

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The Profitability of Electricity, Oil, and Gas Utilities in America

Cited by 3 publications

References 43 publications

Does Adapting the Business Environment Have a More Dominant Effect on Business Performance Than Optimizing Company’s Resources?: Strategies to Improve Business Performance

Does Adapting the Business Environment Have a More Dominant Effect on Business Performance Than Optimizing Company’s Resources?: Strategies to Improve Business Performance

The effect of capital ownership on the relationship between the regulatory process and companies' abnormal return

Efeito da propriedade do capital sobre a relação entre processo regulatório e retorno anormal de empresas

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