Abstract
PurposeThis paper aims to elaborate on the crucial effects that a seemingly detrimental policy change in Spain has had on the international entrepreneurial activities of domestic renewable energy (RE) firms.Design/methodology/approachPrimary data were collected from nine RE companies in Spain and then triangulated with secondary data and interviews from informants in other local institutions.FindingsDomestic RE firms, due to an institutional scape driver action, reacted to an increasingly uncertain and generally more adverse renewable energy policy framework in this country by preferring to internationalise towards foreign markets that had lower political uncertainty than the domestic one.Research limitations/implicationsThis paper complements previous research primarily on firm-specific factors that enhance internationalising firms’ survival and growth through a focus on the impact of a changing institutional-political environment at the home country-level.Practical implicationsPractitioners in the RE sector should analyse the risk of focusing only on the home market, as it can be too dependent on uncontrolled variations in domestic energy policy.Social implicationsThe findings indicate that a more stable and supportive, long-term perspective in the domestic RE policy is essential for the sustained growth and development of this emerging industry.Originality/valueTo analyse the strategy by which a number of purposefully selected companies were able to use international expansion as a survival-seeking strategy against a drastic policy-level change in the domestic RE market.
Highlights
Policies and regulations, which are usually considered hard institutional factors, may play a key role in the development of green, sustainable technologies
Within renewable energy (RE) industries in particular, as the cost of electricity based on RE is still not at a level to compete with other more conventional sources of energy, these newer technologies usually need to be supported by a favourable domestic policy scheme, when system imperfections are detected in the marketplace (Negro et al, 2012)
According to our case-based results, one of the key factors that motivated the internationalisation of the investigated Spanish firms was the sudden, uncertain and rather detrimental changes made to the domestic renewable energy policy
Summary
Policies and regulations, which are usually considered hard institutional factors, may play a key role in the development of green, sustainable technologies. Many different countries have diverse capacities and institutional regulatory systems (e.g. public policy) regarding RE investments (Gonzalez-Perez, 2016) They usually design and implement domestic energy policies according to their own economic, legal and socio-political structure. This means that the RE sector is heavily influenced by the actions of local stakeholders and policymakers’ in each country, thereby stressing the importance of the influence that domestic regulatory institutions may have on the global development of the RE sector. The key policy-level effects of the changing renewal energy regulation in the country and their eventual consequences for the nine selected firms were investigated at three different stages: pre-policy reform, at policy-reform time and postpolicy reform. The main results of the study are presented
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