Firm performance and diversification in the energy sector

Wim Westerman · Adri De Ridder · Marijn Achtereekte

27 citations0/0 files storedManagerial Finance

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance International Business and FDI Firm Innovation and Growth

Abstract

Purpose The study aims to fill a gap in the literature on the economic impact of industrial and international diversification on firm performance in the energy sector. Li et al. (2016) investigate firms listed in China, and this study analyzes firms listed in (Western) Europe. Design/methodology/approach A sample of 129 energy firms is extracted from Datastream and covers the period from January 2009 to December 2015. Univariate and multivariate regression analyses are used to determine a plausible relation of diversification on corporate performance. Also, the difference between renewable energy firms and conventional energy firms is explored. Findings A univariate analysis using both return on assets andTobin's Qas a variable shows that renewable energy firms have a higher profitability than conventional energy firms. However, a multivariate analysis does not confirm this result. The authors also document a negative relation between diversification strategies and firm performance. Research limitations/implications The study uses main industry codes. Yet, one might make a distinction between renewable energy and conventional energy amounts with corporations. Also, the authors cover financial crisis years. Researchers might take into account more recent years. Practical implications The findings of the study highlight the importance of short-term and long-term considerations for practitioners related to demand, the energy mix, oil prices and firm strategies. Originality/value The authors contribute to the debate and the literature when identifying similarities and differences between conventional energy firms and renewable energy firms in their application of diversification strategies and their (relation to) firm performance.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 27 citations exist upstream.

References

2004Firm resources and sustained competitive advantage 1983An Evolutionary Theory of Economic Change.1990Performance Pay and Top-Management Incentives 1991The Theory of Capital Structure 1993Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation 2003Enjoying the Quiet Life? Corporate Governance and Managerial Preferences 1990Managerial discretion and optimal financing policies 2009The International Operations of National Firms: A Study of Direct Foreign Investment

Cited by

2023Market reactions to layoff announcements during crises: Examining impacts and conditioners 2024The impact of energy diversification on firm performance: The moderating role of corporate social responsibility 2024Moderating role of green innovation between sustainability strategies and firm performance in Tanzania 2024Türkiye'de Yenilenebilir ve Geleneksel Enerji Şirketlerinin Finansal Performans Karşılaştırması: DuPont Analizi Yaklaşımı 2022WHAT ARE THE INTERNAL DETERMINANTS OF RETURN ON ASSETS AND EQUITY OF THE ENERGY SECTOR IN TURKEY?

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.