Energy transition and non-energy firms’ financial performance: Do markets value capability-based energy transition strategies?
Selahattin Murat Sirin and
Berna N. Yilmaz
Energy Economics, 2024, vol. 136, issue C
Abstract:
Energy transition has become a major challenge that will shape the global agenda in the coming decades. In addition to governments and major energy firms, non-energy firms also play a significant role in the energy transition with their growing share in renewable energy supply and other pro-environmental investments. Using the Resource-based View and Dynamic Capabilities perspectives, we discuss non-energy firms’ capability-based energy transition strategies and explore the channels through which these strategies affect their financial performance. We test our hypotheses using S&P 500 firms’ data and show that capability-based energy transition strategies have had a positive moderating effect on the relationship between the renewable energy sector performance and non-energy firms’ financial performance in the short term. Furthermore, these strategies have had a positive moderating effect on the relationship between fossil fuel prices and non-energy firms’ financial performance in the long term. Our findings indicate that capability-based energy transition strategies created a virtuous investment–return opportunity for non-energy firms between 2009 and 2021.
Keywords: Strategy; Business; Energy transition; Sustainability; Financial performance (search for similar items in EconPapers)
JEL-codes: G10 G30 M2 Q40 Q42 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:136:y:2024:i:c:s0140988324003669
DOI: 10.1016/j.eneco.2024.107658
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