Fiscal Pressure as a Trigger of Financial Performance for the Energy Industry: An Empirical Investigation across a 16-Year Period

Larissa Batrancea, Mircea Iosif Rus, Ema Speranta Masca and Ioan Dan Morar
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Larissa Batrancea: Faculty of Business, Babes-Bolyai University, 7 Horea Street, 400174 Cluj-Napoca, Romania
Mircea Iosif Rus: National Institute for Research and Development in Constructions, Urbanism and Sustainable Spatial Development “URBAN INCERC”, 117 Calea Floresti, 400524 Cluj-Napoca, Romania
Ema Speranta Masca: Faculty of Economics and Law, “George Emil Palade” University of Medicine, Pharmacy, Science and Technology of Targu Mures, 38 Gheorghe Marinescu Street, 540566 Targu Mures, Romania
Ioan Dan Morar: Faculty of Economic Sciences, University of Oradea, 1 Universitatii Street, 410087 Oradea, Romania

Energies, 2021, vol. 14, issue 13, 1-17

Abstract: Taxation exerts pressure on the economic activities of all companies, including economic entities that operate in the energy industry. This study examined the degree to which fiscal pressure influenced the financial performance of 88 publicly listed companies from the energy industry during a time frame of 16 years (2005Q1–2020Q3). By modelling financial data from the oil, gas and electricity sectors with panel data techniques, our results showed that fiscal pressure had a significant effect on the evolution of company financial performance measured by return on assets, return on equity and return on investment. The study revealed that fiscal pressure had a more positive impact on the financial performance of energy companies than a negative impact. This conclusion is important for overall taxation in the energy industry since corporate taxes, excise duties and mandatory labor contributions are basic resources for state budgets. Our empirical results imply important research directions on the prospect of analyzing company performance.

Keywords: fiscal pressure; financial performance; energy industry (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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