Factors Affecting Return on Assets in the Renewable Energy Sector during Supply Chain Disruptions

Jie Yu ()
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Jie Yu: Claremont Institute for Economic Policy Studies, Claremont, CA 91763, USA

JRFM, 2024, vol. 17, issue 6, 1-18

Abstract: Return on assets (ROA) is a critical metric in assessing a company’s sustainability, especially in light of supply chain disruptions. Within the renewable energy sector, such disruptions often lead to a decline in ROA. Through the utilization of a within-between random model, this study uncovers the necessity for distinct strategies both prior to and during supply chain disruptions to maintain a high ROA. Pre-disruption, emphasis should be placed on securing additional funding for research and development (R&D) initiatives and expanding market reach. However, amid disruptions, sustaining a high ROA demands a strategic pivot. Specifically, renewable energy firms should scale back expansion efforts, redirect cash toward R&D, and exercise caution when venturing into new international markets, particularly in the absence of substantial government subsidies. Notably, this paper focuses solely on large-scale listed companies, overlooking potential innovative strategies employed by smaller-scale companies—an area ripe for future investigation. Despite this limitation, our findings offer valuable insights into enhancing sustainable performance within the renewable energy sector.

Keywords: return on assets; renewable energy; supply chain disruptions; strategies (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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