Renewable Energy and Financial Performance: Cross-country Evidence

Abstract

The objective of this paper is to empirically explore the economic and financial effects of renewable energy consumption on firms’ financial performance. We collect information from Bloomberg and ORBIS (Bureau Van Dijk) databases of a sample of more than 500 firms from 18 countries during the 2009-2017 period. Applying a 2SLS methodology to control for the potential endogeneity concerns, our results indicate a positive effect of renewable energy consumption on firms’ financial performance. This relation is not homogeneous across firms or countries. In particular, our results indicate that this relation is dependent on specific firm-level characteristics and on the national legal and institutional environment.

Keywords: Renewable energy consumption; Financial performance; Firm- and country-level characteristics