IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v12y2019i20p3856-d275696.html
   My bibliography  Save this article

Comparison of the Financial Standing of Companies Generating Electricity from Renewable Sources and Fossil Fuels: A New Hybrid Approach

Author

Listed:
  • Sebastian Klaudiusz Tomczak

    (Department of Operations Research, Faculty of Computer Science and Management, Wrocław University of Science and Technology, Wyb. Wyspiańskiego 27, 50-370 Wrocław, Poland)

Abstract

Companies operating in the energy sector are under pressure to boost the level of green energy production. The use of renewable energy sources will have a positive impact on the environment, but the basic question is whether power plants that produce electricity using renewable energy sources are in better financial condition than those that use only traditional energy sources. We address the latter using a new hybrid approach that extends prior research by combining three analyses: ratio analysis with a large set of indicators, the Altman model and cluster analysis. To test the statistical significance of differences between groups, Student’s t-test is applied. The sample concerns companies from the Baltic States and Central Europe in the years 2008–2017. The results indicate that in most cases there is no statistical difference in the financial standing of companies that use renewable energy sources and those that generate only fossil fuel-based energy.

Suggested Citation

  • Sebastian Klaudiusz Tomczak, 2019. "Comparison of the Financial Standing of Companies Generating Electricity from Renewable Sources and Fossil Fuels: A New Hybrid Approach," Energies, MDPI, vol. 12(20), pages 1-20, October.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:20:p:3856-:d:275696
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/12/20/3856/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/12/20/3856/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Maryniak, Paweł & Trück, Stefan & Weron, Rafał, 2019. "Carbon pricing and electricity markets — The case of the Australian Clean Energy Bill," Energy Economics, Elsevier, vol. 79(C), pages 45-58.
    2. Jamasb, Tooraj & Pollitt, Michael & Triebs, Thomas, 2008. "Productivity and efficiency of US gas transmission companies: A European regulatory perspective," Energy Policy, Elsevier, vol. 36(9), pages 3398-3412, September.
    3. Managi, Shunsuke & Okimoto, Tatsuyoshi, 2013. "Does the price of oil interact with clean energy prices in the stock market?," Japan and the World Economy, Elsevier, vol. 27(C), pages 1-9.
    4. Aslani, Alireza & Mohaghar, Ali, 2013. "Business structure in renewable energy industry: Key areas," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 569-575.
    5. Capece, Guendalina & Cricelli, Livio & Di Pillo, Francesca & Levialdi, Nathan, 2010. "A cluster analysis study based on profitability and financial indicators in the Italian gas retail market," Energy Policy, Elsevier, vol. 38(7), pages 3394-3402, July.
    6. Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2011. "Does it really pay to be green? Determinants and consequences of proactive environmental strategies," Journal of Accounting and Public Policy, Elsevier, vol. 30(2), pages 122-144, March.
    7. Michael Doumpos & Kostas Andriosopoulos & Emilios C. C Galariotis & Georgia Makridou & Constantin Zopounidis, 2017. "Corporate failure prediction in the European energy sector: A multicriteria approach and the effect of country characteristics," Post-Print hal-02879853, HAL.
    8. Dragos Paun, 2017. "Sustainability and Financial Performance of Companies in the Energy Sector in Romania," Sustainability, MDPI, vol. 9(10), pages 1-11, September.
    9. Kjetil Telle, 2006. "“It Pays to be Green” – A Premature Conclusion?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(3), pages 195-220, November.
    10. Sueyoshi, Toshiyuki & Goto, Mika, 2009. "Can environmental investment and expenditure enhance financial performance of US electric utility firms under the clean air act amendment of 1990?," Energy Policy, Elsevier, vol. 37(11), pages 4819-4826, November.
    11. Henriques, Irene & Sadorsky, Perry, 2008. "Oil prices and the stock prices of alternative energy companies," Energy Economics, Elsevier, vol. 30(3), pages 998-1010, May.
    12. Doumpos, Michalis & Andriosopoulos, Kostas & Galariotis, Emilios & Makridou, Georgia & Zopounidis, Constantin, 2017. "Corporate failure prediction in the European energy sector: A multicriteria approach and the effect of country characteristics," European Journal of Operational Research, Elsevier, vol. 262(1), pages 347-360.
    13. Inchauspe, Julian & Ripple, Ronald D. & Trück, Stefan, 2015. "The dynamics of returns on renewable energy companies: A state-space approach," Energy Economics, Elsevier, vol. 48(C), pages 325-335.
    14. Bobinaite, Viktorija, 2015. "Financial sustainability of wind electricity sectors in the Baltic States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 794-815.
    15. Halkos, George E. & Tzeremes, Nickolaos G., 2012. "Analyzing the Greek renewable energy sector: A Data Envelopment Analysis approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2884-2893.
    16. Bohl, Martin T. & Kaufmann, Philipp & Stephan, Patrick M., 2013. "From hero to zero: Evidence of performance reversal and speculative bubbles in German renewable energy stocks," Energy Economics, Elsevier, vol. 37(C), pages 40-51.
    17. Capece, Guendalina & Cricelli, Livio & Di Pillo, Francesca & Levialdi, Nathan, 2012. "New regulatory policies in Italy: Impact on financial results, on liquidity and profitability of natural gas retail companies," Utilities Policy, Elsevier, vol. 23(C), pages 90-98.
    18. Özgür Arslan-Ayaydin & James Thewissen, 2016. "The financial reward for environmental performance in the energy sector," Energy & Environment, , vol. 27(3-4), pages 389-413, May.
    19. Stefan Trück & Rafał Weron, 2016. "Convenience Yields and Risk Premiums in the EU‐ETS—Evidence from the Kyoto Commitment Period," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 36(6), pages 587-611, June.
    20. Michalis Doumpos & Kostas Andriosopoulos & Emilios Galariotis & Georgia Makridou & Constantin Zopounidis, 2017. "Corporate failure prediction in the European energy sector: A multicriteria approach and the effect of country characteristics," Post-Print hal-01578092, HAL.
    21. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Data envelopment analysis for environmental assessment: Comparison between public and private ownership in petroleum industry," European Journal of Operational Research, Elsevier, vol. 216(3), pages 668-678.
    22. Kumar, Surender & Managi, Shunsuke & Matsuda, Akimi, 2012. "Stock prices of clean energy firms, oil and carbon markets: A vector autoregressive analysis," Energy Economics, Elsevier, vol. 34(1), pages 215-226.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Janusz Nesterak & Marta Kołodziej-Hajdo & Michał J. Kowalski, 2023. "Controlling in the Process of Development of the Energy and Heating Sector Based on Research of Enterprises Operating in Poland," Energies, MDPI, vol. 16(2), pages 1-30, January.
    2. Fuentes González, Fabián & Webb, Janette & Sharmina, Maria & Hannon, Matthew & Braunholtz-Speight, Timothy & Pappas, Dimitrios, 2022. "Local energy businesses in the United Kingdom: Clusters and localism determinants based on financial ratios," Energy, Elsevier, vol. 239(PB).
    3. Mohd Chachuli, Fairuz Suzana & Ahmad Ludin, Norasikin & Md Jedi, Muhamad Alias & Hamid, Norul Hisham, 2021. "Transition of renewable energy policies in Malaysia: Benchmarking with data envelopment analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    4. Sebastian Klaudiusz Tomczak & Anna Skowrońska-Szmer & Jan Jakub Szczygielski, 2021. "Is It Possible to Make Money on Investing in Companies Manufacturing Solar Components? A Panel Data Approach," Energies, MDPI, vol. 14(12), pages 1-20, June.
    5. Sebastian Klaudiusz Tomczak, 2021. "Ratio Selection between Six Sectors in the Visegrad Group Using Parametric and Nonparametric ANOVA," Energies, MDPI, vol. 14(21), pages 1-20, November.
    6. Rafael Ninno Muniz & Stéfano Frizzo Stefenon & William Gouvêa Buratto & Ademir Nied & Luiz Henrique Meyer & Erlon Cristian Finardi & Ricardo Marino Kühl & José Alberto Silva de Sá & Brigida Ramati Per, 2020. "Tools for Measuring Energy Sustainability: A Comparative Review," Energies, MDPI, vol. 13(9), pages 1-27, May.
    7. Sebastian Klaudiusz Tomczak & Anna Skowrońska-Szmer & Jan Jakub Szczygielski, 2020. "Is Investing in Companies Manufacturing Solar Components a Lucrative Business? A Decision Tree Based Analysis," Energies, MDPI, vol. 13(2), pages 1-27, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sebastian Klaudiusz Tomczak & Anna Skowrońska-Szmer & Jan Jakub Szczygielski, 2020. "Is Investing in Companies Manufacturing Solar Components a Lucrative Business? A Decision Tree Based Analysis," Energies, MDPI, vol. 13(2), pages 1-27, January.
    2. Sebastian Klaudiusz Tomczak & Anna Skowrońska-Szmer & Jan Jakub Szczygielski, 2021. "Is It Possible to Make Money on Investing in Companies Manufacturing Solar Components? A Panel Data Approach," Energies, MDPI, vol. 14(12), pages 1-20, June.
    3. Uddin, Gazi Salah & Rahman, Md Lutfur & Hedström, Axel & Ahmed, Ali, 2019. "Cross-quantilogram-based correlation and dependence between renewable energy stock and other asset classes," Energy Economics, Elsevier, vol. 80(C), pages 743-759.
    4. Zhang, Guofu & Du, Ziping, 2017. "Co-movements among the stock prices of new energy, high-technology and fossil fuel companies in China," Energy, Elsevier, vol. 135(C), pages 249-256.
    5. Dragos Paun, 2017. "Sustainability and Financial Performance of Companies in the Energy Sector in Romania," Sustainability, MDPI, vol. 9(10), pages 1-11, September.
    6. Niu, Hongli, 2021. "Correlations between crude oil and stocks prices of renewable energy and technology companies: A multiscale time-dependent analysis," Energy, Elsevier, vol. 221(C).
    7. Gbenga Ibikunle & Tom Steffen, 2017. "European Green Mutual Fund Performance: A Comparative Analysis with their Conventional and Black Peers," Journal of Business Ethics, Springer, vol. 145(2), pages 337-355, October.
    8. Ansaram, Karishma & Petitjean, Mikael, 2024. "A global perspective on the nexus between energy and stock markets in light of the rise of renewable energy," Energy Economics, Elsevier, vol. 131(C).
    9. He, Xiaojuan & Mishra, Shekhar & Aman, Ameenullah & Shahbaz, Muhammad & Razzaq, Asif & Sharif, Arshian, 2021. "The linkage between clean energy stocks and the fluctuations in oil price and financial stress in the US and Europe? Evidence from QARDL approach," Resources Policy, Elsevier, vol. 72(C).
    10. Ahmad, Wasim & Sadorsky, Perry & Sharma, Amit, 2018. "Optimal hedge ratios for clean energy equities," Economic Modelling, Elsevier, vol. 72(C), pages 278-295.
    11. Mihail Busu & Alexandra Catalina Nedelcu, 2017. "Sustainability and Economic Performance of the Companies in the Renewable Energy Sector in Romania," Sustainability, MDPI, vol. 10(1), pages 1-16, December.
    12. Doumpos, Michalis & Andriosopoulos, Kostas & Galariotis, Emilios & Makridou, Georgia & Zopounidis, Constantin, 2017. "Corporate failure prediction in the European energy sector: A multicriteria approach and the effect of country characteristics," European Journal of Operational Research, Elsevier, vol. 262(1), pages 347-360.
    13. Hemrit, Wael & Benlagha, Noureddine, 2021. "Does renewable energy index respond to the pandemic uncertainty?," Renewable Energy, Elsevier, vol. 177(C), pages 336-347.
    14. Gargallo, Pilar & Lample, Luis & Miguel, Jesús A. & Salvador, Manuel, 2024. "Sequential management of energy and low-carbon portfolios," Research in International Business and Finance, Elsevier, vol. 69(C).
    15. Kocaarslan, Baris & Soytas, Ugur, 2019. "Dynamic correlations between oil prices and the stock prices of clean energy and technology firms: The role of reserve currency (US dollar)," Energy Economics, Elsevier, vol. 84(C).
    16. Inchauspe, Julian & Ripple, Ronald D. & Trück, Stefan, 2015. "The dynamics of returns on renewable energy companies: A state-space approach," Energy Economics, Elsevier, vol. 48(C), pages 325-335.
    17. Shah, Adil Ahmad & Sahay, Arvind, 2024. "Is gold a preferable diversifier of cleaner equity risk across diverse scenarios? Evidence from multidimensional connectedness and spillover measures," Energy, Elsevier, vol. 305(C).
    18. Asl, Mahdi Ghaemi & Canarella, Giorgio & Miller, Stephen M., 2021. "Dynamic asymmetric optimal portfolio allocation between energy stocks and energy commodities: Evidence from clean energy and oil and gas companies," Resources Policy, Elsevier, vol. 71(C).
    19. Maghyereh, Aktham I. & Awartani, Basel & Abdoh, Hussein, 2019. "The co-movement between oil and clean energy stocks: A wavelet-based analysis of horizon associations," Energy, Elsevier, vol. 169(C), pages 895-913.
    20. Matteo Foglia & Eliana Angelini, 2020. "Volatility Connectedness between Clean Energy Firms and Crude Oil in the COVID-19 Era," Sustainability, MDPI, vol. 12(23), pages 1-22, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:12:y:2019:i:20:p:3856-:d:275696. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.