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The role of sources of finance on the development of wind technology

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  • Corsatea, Teodora Diana
  • Giaccaria, Sergio
  • Arántegui, Roberto Lacal

Abstract

This paper contributes to the debate on the competitiveness and maturity of wind technology by carrying out an analysis on research investments and sales of a panel of 10 wind manufacturers over the period 2002–2011, examining the extent to which public and private funding affect the competitiveness of these wind corporations. A group of major manufacturers of wind turbines with production in 2006 totaling more than 70% of the global supplied capacities is considered a representative cluster of green innovative industry for this study. Public support for research, development and demonstration (RD&D), incentives for the production of wind energy and access to credit are the three main sources of finance addressed herein. Corporate debt is the primary factor supporting both wind technology research investment and sales of wind turbines, whereas other sources of finance play a limited role. The reduction in that source of finance has important repercussions for the development of wind energy. The econometric analysis suggests that regulatory risks play a key role for the development of wind technology, even stronger than the financial risk. Thee former originate in unexpected decisions to stop subsidies (e.g. deployment ones), whereas the latter arise from restrictive access to credit.

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  • Corsatea, Teodora Diana & Giaccaria, Sergio & Arántegui, Roberto Lacal, 2014. "The role of sources of finance on the development of wind technology," Renewable Energy, Elsevier, vol. 66(C), pages 140-149.
    • Handle: RePEc:eee:renene:v:66:y:2014:i:c:p:140-149
    DOI: 10.1016/j.renene.2013.11.063
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    11. Bongsuk Sung & Myoung Shik Choi & Woo-Yong Song, 2019. "Exploring the Effects of Government Policies on Economic Performance: Evidence Using Panel Data for Korean Renewable Energy Technology Firms," Sustainability, MDPI, vol. 11(8), pages 1-19, April.
    12. Farah Roslan & Borhan Abdullah & Mohd Khairul Amri Kamarudin, 2023. "A panel data method towards the effectiveness of sources of finance in stimulating the realisation of renewable energy technologies: Empirical evidence for Asia‐Pacific," Australian Economic Papers, Wiley Blackwell, vol. 62(4), pages 693-722, December.
    13. Iqbal, Shahid & Wang, Ying & Ali, Sharafat & Haider, Muhammad Afaq & Amin, Nabila, 2023. "Shifting to a green economy: Asymmetric macroeconomic determinants of renewable energy production in Pakistan," Renewable Energy, Elsevier, vol. 202(C), pages 234-241.
    14. Corsatea, Teodora Diana, 2014. "Increasing synergies between institutions and technology developers: Lessons from marine energy," Energy Policy, Elsevier, vol. 74(C), pages 682-696.
    15. Feng, Xiao & Li, Yuyu & Huang, Bo, 2023. "Research on manufacturer's investment strategy and green credit policy for new energy vehicles based on consumers' preferences and technology adoption," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    16. Przychodzen, Wojciech & Przychodzen, Justyna, 2020. "Determinants of renewable energy production in transition economies: A panel data approach," Energy, Elsevier, vol. 191(C).
    17. Charfeddine, Lanouar & Kahia, Montassar, 2019. "Impact of renewable energy consumption and financial development on CO2 emissions and economic growth in the MENA region: A panel vector autoregressive (PVAR) analysis," Renewable Energy, Elsevier, vol. 139(C), pages 198-213.
    18. Bongsuk Sung & Myung-Bae Yeom & Hong-Gi Kim, 2017. "Eco-Efficiency of Government Policy and Exports in the Bioenergy Technology Market," Sustainability, MDPI, vol. 9(9), pages 1-18, September.
    19. Bongsuk Sung & Cui Wen, 2018. "Causal Dynamic Relationships between Political–Economic Factors and Export Performance in the Renewable Energy Technologies Market," Energies, MDPI, vol. 11(4), pages 1-18, April.
    20. Best, Rohan, 2017. "Switching towards coal or renewable energy? The effects of financial capital on energy transitions," Energy Economics, Elsevier, vol. 63(C), pages 75-83.
    21. Lingling Wang & Tsunemi Watanabe, 2017. "Influence of Trust on Biomass Supply Decision-Making in China," Energies, MDPI, vol. 10(11), pages 1-19, October.
    22. Cristian Matti & Davide Consoli & Elvira Uyarra, 2017. "Multi level policy mixes and industry emergence: The case of wind energy in Spain," Environment and Planning C, , vol. 35(4), pages 661-683, June.
    23. Corsatea, Teodora Diana & Giaccaria, Sergio & Covrig, Catalin-Felix & Zaccarelli, Nicola & Ardelean, Mircea, 2016. "RES diffusion and R&D investments in the flexibilisation of the European electricity networks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1069-1082.
    24. Kim, Jeayoon & Park, Kwangwoo, 2016. "Financial development and deployment of renewable energy technologies," Energy Economics, Elsevier, vol. 59(C), pages 238-250.

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    More about this item

    Keywords

    Wind energy; Finance; Governmental policy; Research and development;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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