Renewable Energy Firms Research Articles

An institutional perspective of public policy and network effects in the renewable energy industry: enablers or disablers of entrepreneurial behaviour and innovation?

This study extends theory on the effects of public policies stimulating technology demand and of industry network ties on firm-level entrepreneurial behaviour. We take an institutional perspective to develop a theoretical model examining the mechanisms through which public policies, regulatory uncertainty, and industry network ties affect firm-level entrepreneurial decision-making processes and the ability to introduce highly innovative products and to sustain superior performance. We focus on firm-level effects, which enables the study of the tension between institutional pressures of homogeneity and competitive pressures of heterogeneity for entrepreneurial decision-making processes in environments characterized by policy-induced market demands. To test our hypotheses, we draw on data from a large-scale survey among German renewable energy firms. Our results show that public policies can constrain firm innovativeness and risk-taking behaviour because they steer firms towards a more conservative attitude and discourage the pursuit of high-risk innovation projects. However, firms can counteract these influences and enhance their innovativeness by maintaining close network ties with research associations as we find that innovativeness and a highly innovative product portfolio are key success factors. In summary, these findings provide important implications for the study of public policy effects, industry network ties and entrepreneurial behaviour.

Exploring Israeli Venture Capital Investing In Renewable Energy

Israel’s venture capital market is one of the largest in terms of capital investing in the world. However, in 2014, 5 of 83 independent venture capital firms located in Israel invested in renewable energy portfolio companies. The result of investing in few renewable energy firms in Israel is a continued reliance on imported fossil fuels from geographically distant nations. The importation of fossil fuels creates an added security risk in an already hostile political environment. The gap in research addressed in this paper explored factors for the small number of renewable energy firms receiving venture capital funding in Israel. The research question guiding this study was what are the factors for the small number of renewable energy firms receiving funding in Israel. The lack of renewable energy firm funding appears to be as a result of three factors. First is low return on investment. Second is regulatory uncertainty from the Israeli government. Third is the lack of knowledge of renewable energy by independent venture capitalists.

Exploiting the Implementation Gap: Policy Divergence and Industrial Upgrading in China's Wind and Solar Sectors

This article argues that manufacturing policies of Chinese local governments have provided an important corrective to some of the weaknesses inherent in the central government’s indigenous innovation framework, most importantly its inattention to the importance of advanced manufacturing capabilities for innovation. Based on an original dataset of over 100 executive interviews conducted with 43 Chinese wind and solar firms, I identify both central government R&D funding and continued local government support for manufacturing as a critical factors in enabling innovation among China’s renewable energy firms. In particular, this article shows that firms have utilized a combination of both central and local government policies to establish unique engineering capabilities required for innovation in commercialization and scale - up to mass production. The findings suggest that continued local government support for the manufacturing economy has not undermined central government innovation policies, but has (1) broadened the range of resources available to entrepreneurial firms and (2) enabled new options for industrial upgrading that are outside the conceptualization of innovation underlying the central government’s indigenous innovation framework.

Contributions of Renewable Energy Industries to the Local Economy in North Dakota

Energy production in North Dakota is typically associated with fossil fuels, but in the past decade there has been considerable growth in renewable energy, which is comprised of ethanol production, electricity generation from wind turbines, and the manufacture of wind turbine components. Using expenditures data from renewable energy firms, we find that expansion of renewable energy infrastructure between 2002 and 2011 increased retail sales, personal income, employment, and total tax collections. Total economic impact associated with construction expenditures peaked in 2008 and 2009. In 2011 the total economic impact of the operations of renewable energy industries in North Dakota was $1.0 billion, two-thirds of which was contributed by ethanol production.

The impact of learning effects of environmental management system on performance of renewable energy firms

The climatic change problem has resulted in increased interest in sustainable development. Firms in renewable energy industry are currently facing challenges to maintain competitiveness while keeping minimal environmental impacts. Responding to the above challenges, environmental management system (EMS) has becoming more popular within organizational policies, programs, and operating agendas. Especially, in the knowledge‐intensive industry, the learning efforts of EMS can effectively improve technological development, managing efficiency, and firm performance at the same time. Then, the aim of this article is to examine the relationships among strategic objectives, the learning effects of EMS, and firm performance in the renewable energy industry. After practical investigation, it shows that the gaps between strategic objectives and firm performance can be narrowed if suitable management skills are applied for different EMS approaches. On this basis, this article advises that suitable management controls should be employed under different EMS approaches. © 2015 American Institute of Chemical Engineers Environ Prog, 34: 1106–1112, 2015

The cross-section of returns, benchmark model parameters, and idiosyncratic volatility of nuclear energy firms after Fukushima Daiichi

This study analyzes how the stock market returns, the factor loadings from the Carhart (1997) 4-factor model, and the idiosyncratic volatility of shares in energy firms have been affected by the Fukushima nuclear accident. Unlike existing studies, which provide evidence of a wealth transfer from nuclear to renewable energy firms for specific countries, we use an international sample and investigate whether changes in the regulatory environment and the firm-specific commitment to nuclear and renewable energies correlate with the capital market's reactions to the Fukushima Daiichi accident. Our findings suggest that the more a firm relies on nuclear power, the more its share price declined after the accident. A commitment to renewable energies does not prevent declines in share prices but significantly helps to reduce the increase in market beta that is associated with this event. Nuclear energy firms domiciled in countries with a higher number of regulatory interventions that were triggered by the catastrophe have lower abnormal returns than those that are domiciled elsewhere. However, as a cross-sectional analysis reveals, a stronger commitment to nuclear power is the main driver for negative stock market returns. Furthermore, nuclear energy firms domiciled in countries with stronger regulatory shifts away from nuclear energy experience significant increases in market beta and the book-to-market equity factor loading according to the Carhart (1997) 4-factor model. We conclude that capital market participants are able to differentiate between the affectedness of firms with respect to their product portfolio. Energy firms could prevent increases in market beta due to catastrophes such as the Fukushima Daiichi accident by shifting some of their energy production from nuclear to renewable or other sources.

Competitive advantage of German renewable energy firms in India and China

PurposeThe purpose of this paper is to analyze the competitive advantage of German renewable energy firms in India and China. Porter's diamond model is modified and specified for the renewable energy industry.Design/methodology/approachBased on Porter's diamond model of competitiveness, the authors examine the demand for renewable energies in India and China and the ability of German firms to meet this demand.FindingsWhile the overall demand for renewable energies in India and China is significant, the study reveals remarkable differences in the fields of biomass, solar and wind energy. The findings are meant to address managers in the renewable energy industry and to aid policy makers in environmental support and action.Research limitations/implicationsA major theoretical contribution of the study is the application of Porter's diamond model to the renewable energy industry, as well as the identification and operationalization of the relevant causal and proxy variables.Practical implicationsThe paper provides a detailed analysis of the factors on which the competitive advantage of German renewable energy technologies in India and China is based. This helps managers of renewable energy firms to focus on those areas where they have particular strengths and to introduce measures to overcome potential weaknesses.Originality/valueThe authors used a modified version of Porter's diamond model and specified it for the renewable energy industry. The model was tested empirically in Germany and both emerging countries on the basis of secondary data.

The Effects of the Fukushima Daiichi Nuclear Accident on Stock Prices of Firms with Nuclear, Renewable and Conventional Energy Production

This study analyzes how the stock market returns, the factor loadings from the Carhart (1997) 4-factor model, and the idiosyncratic volatility of shares in energy firms have been affected by the Fukushima nuclear accident. In comparison with existing studies, which provide evidence of a wealth transfer from nuclear to renewable energy firms for specific countries, we use an international sample and investigate whether changes in the regulatory environment and the firm-specific commitment to nuclear and renewable energies correlate with the capital market's reactions to the Fukushima Daiichi accident. Our findings suggest that the more a firm relies on nuclear power, the more its share price declined after the accident. A commitment to renewable energies does not prevent declines in share prices but significantly helps to reduce the increase in market beta that is associated with this event. Nuclear energy firms which are domiciled in countries with a higher level of regulatory changes that were triggered by the catastrophe have lower abnormal returns than their peers. However, as a cross-sectional analysis reveals, higher commitments to nuclear power are the main driver for negative stock market returns. Furthermore, nuclear energy firms domiciled in countries with stronger regulatory shifts away from nuclear energy experience significant increases in the size- and book-to-market equity factor loadings from the Carhart (1997) 4-factor model. We conclude that capital market participants are able to differentiate between the affectedness of firms with respect to their product portfolio. Energy firms could prevent increases in market beta due to catastrophes such as the Fukushima Daiichi accident by shifting some of their energy production from nuclear to renewable or other energies.

Renewable Energy in North Carolina: The Potential Supply Chain and Connections to Existing Renewable and Energy Efficiency Firms

Aunque nuestro entendimiento de la dinámica de aglomeración de la industria está bastante desarrollado, no está tan claro si las empresas de energía renovables y sus potenciales suplidores se ubicarán de manera similar a otras industrias mejores establecidas. En consecuencia, este ensayo debe ser visto principalmente como un primer paso para descifrar las tendencias de colocalización de la industria de renovables y sus potenciales suplidores. Basado en la metodología y datos elaborado por el Proyecto de Política de Energía Renovable y la Asociación de Energía Sustentable de Carolina del Norte, encontramos que la geografía de los potenciales suplidores está fuertemente concentrada a lo largo del corredor I-85 entre Charlotte, la Triad y el Research Triangle con otros puntos importantes en Hickory, Wilmington y especialmente Asheville. También parece que los posibles suplidores tienen preferencias de co-localización que se imponen de manera significativa con firmas existentes de energía renovable y eficiencia energética, localizadas en Carolina del Norte. Poco entendimiento existe alrededor de cómo se relacionan entre sí estos potenciales suministradores y empresas de energía renovables y de eficiencia energética con respecto a los efectos de la potencial difusión de conocimiento y la formación de redes formales e informales de producción—un área clave para la investigación futura.

Competitive advantage of German renewable energy firms in Russsia – An empirical study based on Porter’s diamond

This article analyzes the competitive advantage of German renewable energy firms in Russia. Based on Porter’s diamond model of competitiveness, we examine the demand for renewable energy in Russia and German firms’ ability to meet this demand. While the overall demand for renewable energy in Russia is still low, the study reveals formidable opportunities in the fields of biomass, solar and wind energy. Our findings are meant to address managers in the renewable energy industry and to aid policy makers in environmental support and action. Dieser Artikel analysiert die Wettbewerbsvorteile deutscher Unternehmen im Bereich erneuerbarer Energien in Russland. Basierend auf Porter’s Diamantansatz untersuchen wir die Nachfrage nach erneuerbaren Energien in Russland und die Fahigkeit deutscher Unternehmungen, diese zu bedienen. Wahrend die Nachfrage nach erneuerbaren Energien in Russland insgesamt noch auf einem niedrigen Niveau ist, zeigt die Studie im Bereich Biomasse, Solar- und Windenergie betrachtliche Marktchancen auf. Die Ergebnisse der Studie haben zahlreiche Implikationen fur Manager von Unternehmungen im Bereich erneuerbarer Energien und fur politische Entscheidungstrager im Energie- und Umweltsektor.

The Eco-Industrial Complex in USA — Global Warming and Rent-Seeking Coalitions

The public choice model of rent-seeking economics is used to analyze the behaviour of firms, interest groups and scientists participating in efforts to impose climate change cap-and-trade regulations of greenhouse gasses in the USA. This may serve as a case study for the entire world. Yandle's “Bootleggers and Baptists” model and McChesney's model “money for nothing” are used to explain the formation, motives and interests of the groups lobbying for or against this type of regulation. The eco-industrial complex includes firms seeking favorable treatment under cap-and-trade regime, scientists relying on the global warming panic to keep research funds flowing and environmentalist NGOs interested in setting the public agenda and attracting grants and donations. According to our analysis nuclear and renewable energy firms are acting as bootleggers (who profit from legally restricted energy market), while the oil firms are behaving as agents paying protection money) to politicians and NGOs for not demanding harmful public regulation (legal extortion, i.e. “money for nothing”).

CARBON COMMERCE FTC moves to investigate climate-offset market

The Federal Trade Commission (FTC) has agreed to probe the growing number of firms selling carbon offsets to individuals. Carbon offsets are credits that consumers purchase to compensate for the carbon dioxide emissions from their driving, air travel, electricity use, and other activities. Carbon-offset companies are expected to use the credits to fund tree plantings, support renewable energy firms, and engage in other projects that offset a certain amount of greenhouse gas emissions. The number of companies selling carbon offsets has grown rapidly in the past few years with almost no regulation. The firms charge widely different prices for each ton of CO 2 offset. Critics say some of the companies are failing to invest in legitimate carbon-offset projects. Last month, Rep. Edward J. Markey (D-Mass.), chair of the House Select Committee on Energy Independence & Global Warming, requested the probe, and on Aug. 9, FTC announced a review of the ...

Financing the Alternative: Renewable Energy in Developing and Transition Countries

This paper examines the determinants of credit allocation to renewable energy firms in developing and transition countries. Using a simple en- dogenous growth model, we show that the development of the renewable energy sector, i.e. the diversification of renewable energy resources used in primary energy production, depends on the quality of financial intermedia- tion, debtor information costs to banks, and financing needs of renewable energy firms. Policies should aim at increasing financial sector perfor- mance through better institutional frameworks and improving financing conditions for new energy firms. The empirical analysis confirms the pos- itive effect of financial intermediary development on the renewable energy sector.