Abstract
In an era of increasing energy production from renewable sources, the demand for components for renewable energy systems has dramatically increased. Consequently, managers and investors are interested in knowing whether a company associated with the semiconductor and related device manufacturing sector, especially the photovoltaic (PV) systems manufacturers, is a money-making business. We apply a new approach that extends prior research by applying decision trees (DTs) to identify ratios (i.e., indicators), which discriminate between companies within the sector that do (designated as “green”) and do not (“red”) produce elements of PV systems. Our results indicate that on the basis of selected ratios, green companies can be distinguished from the red companies without an in-depth analysis of the product portfolio. We also find that green companies, especially operating in China are characterized by lower financial performance, thus providing a negative (and unexpected) answer to the question posed in the title.
Highlights
The majority of the global energy supply is generated by the burning of fossil fuels
Fossil fuels are distributed unequally across the global geography, creating challenges related to access in unstable and conflict zones. This has resulted in a shift towards the use of renewable energy sources (RES), with the intention of reducing dependency on fossil fuels and the challenges associated with the use of fossil fuels
Our study is similar to these studies; we consider financial ratios, through the use of decision trees (DTs), we identify and analyze financial ratios to gain an insight into the performance of green companies
Summary
The majority of the global energy supply is generated by the burning of fossil fuels. Progress and global economic growth have been accompanied by an increase in the consumption of fossil fuels, resulting in climate change and global warming. Fossil fuels are distributed unequally across the global geography, creating challenges related to access in unstable and conflict zones. This has resulted in a shift towards the use of renewable energy sources (RES), with the intention of reducing dependency on fossil fuels and the challenges associated with the use of fossil fuels. Renewable energy is locally available, clean, sustainable and eco-friendly and offers an attractive alternative to fossil fuels. According to data [1] available from the International
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