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The performance of specialized and oriented diversified firms: A comparative analysis from the targeted expansion of renewable energy business of listed companies

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  • Lin, Boqiang
  • Wang, Siquan

Abstract

With the rise of high-tech industry and the continuous change of business scope of enterprises, it is vital to study the different performance between enterprises with professional development and enterprises with business orientation expansion across the industrial chain, and this process is related to the industrial development background of the region where the enterprises are located. The development of renewable energy industry provides an excellent opportunity for this research. By identifying the business data of Chinese listed renewable energy companies from 2003 to 2021, this paper explores the performance of their renewable energy business expansion, and further uses the US sample for comparative analysis. First, the empirical results show that the expansion of renewable energy business contributes to the outstanding performance of firms. Second, compared with American enterprises, Chinese enterprises have achieved greater relative performance improvement in expanding renewable energy business, which is mainly due to the advantages of directional transformation of Chinese manufacturing enterprises. Finally, China's policy environment is conducive to professional enterprises to achieve more outstanding performance when expanding renewable energy business. This study helps to understand the differences between specialized development companies and directional diversified business expansion companies, and has certain implications for the development of the renewable energy industry and industrial policies.

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  • Lin, Boqiang & Wang, Siquan, 2023. "The performance of specialized and oriented diversified firms: A comparative analysis from the targeted expansion of renewable energy business of listed companies," International Review of Financial Analysis, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finana:v:89:y:2023:i:c:s1057521923002582
    DOI: 10.1016/j.irfa.2023.102742
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