IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v12y2019i14p2647-d247240.html
   My bibliography  Save this article

Assessing Business Risks of Natural Gas Trading Companies: Evidence from GET Baltic

Author

Listed:
  • Mangirdas Morkunas

    (Faculty of Economics and Business, Mykolas Romeris University, Ateities str. 20, Vilnius 08303, Lithuania)

  • Gintaras Cernius

    (Faculty of Economics and Business, Mykolas Romeris University, Ateities str. 20, Vilnius 08303, Lithuania)

  • Gintare Giriuniene

    (Faculty of Economics and Business, Mykolas Romeris University, Ateities str. 20, Vilnius 08303, Lithuania)

Abstract

The aim of this research is to distinguish business risks that affect natural gas trading companies operating in the liberalized natural gas market and to assess them according to the potential impact on the aforementioned gas trading companies. To achieve this, a study of international scientific literature and empirical research was conducted, as well as the methods of expert survey, Analytical Hierarchy Process with different measurement scales and logical investigation. The research of the business risks of natural gas trading companies reflected that natural gas trading companies in the liberalized market distinguish in significantly different business risks’ portfolios from those that operate under monopoly conditions. It was also found that it is difficult to evaluate the business risks’ importance for the natural gas trading companies acting in liberalized markets because they characterize in a hierarchical structure, which means that they are prone to cascading effects.

Suggested Citation

  • Mangirdas Morkunas & Gintaras Cernius & Gintare Giriuniene, 2019. "Assessing Business Risks of Natural Gas Trading Companies: Evidence from GET Baltic," Energies, MDPI, vol. 12(14), pages 1-14, July.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:14:p:2647-:d:247240
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/12/14/2647/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/12/14/2647/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paraschiv, Florentina, 2013. "Price Dynamics in Electricity Markets," Working Papers on Finance 1314, University of St. Gallen, School of Finance.
    2. Ashish Arora & Alfonso Gambardella, 1997. "Domestic Markets And International Competitiveness: Generic And Product‐Specific Competencies In The Engineering Sector," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 53-74, July.
    3. Liu, Youbo & Zuo, Kunyu & Liu, Xueqin (Amy) & Liu, Junyong & Kennedy, Jason M., 2018. "Dynamic pricing for decentralized energy trading in micro-grids," Applied Energy, Elsevier, vol. 228(C), pages 689-699.
    4. Florentina Paraschiv, 2013. "Price Dynamics in Electricity Markets," International Series in Operations Research & Management Science, in: Raimund M. Kovacevic & Georg Ch. Pflug & Maria Teresa Vespucci (ed.), Handbook of Risk Management in Energy Production and Trading, edition 127, chapter 0, pages 47-69, Springer.
    5. José M. Merigó, 2015. "Decision-making under risk and uncertainty and its application in strategic management," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(1), pages 93-116, February.
    6. Juris, Andrej, 1998. "The emergence of markets in the natural gas industry," Policy Research Working Paper Series 1895, The World Bank.
    7. Rasa SmaliukienÄ— & Rasa SmaliukienÄ— & Salvatore Monni, 2019. "A step-by-step approach to social marketing in energy transition," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 1(1), pages 19-32, March.
    8. E. Allevi & L. Boffino & M. E. Giuli & G. Oggioni, 2018. "Evaluating the impacts of the external supply risk in a natural gas supply chain: the case of the Italian market," Journal of Global Optimization, Springer, vol. 70(2), pages 347-384, February.
    9. Bedendo, Mascia & Colla, Paolo, 2015. "Sovereign and corporate credit risk: Evidence from the Eurozone," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 34-52.
    10. Mohseni, Farzad & Görling, Martin & Alvfors, Per, 2013. "The competitiveness of synthetic natural gas as a propellant in the Swedish fuel market," Energy Policy, Elsevier, vol. 52(C), pages 810-818.
    11. Robert Ready & Mariano Croce & Federico Gavazzoni & Riccardo Colacito, 2016. "Currency Risk Factors in a Recursive Multi-Country Economy," 2016 Meeting Papers 297, Society for Economic Dynamics.
    12. Ric Colacito & Mariano M. Croce & Federico Gavazzoni & Robert Ready, 2018. "Currency Risk Factors in a Recursive Multicountry Economy," Journal of Finance, American Finance Association, vol. 73(6), pages 2719-2756, December.
    13. Aven, Terje, 2017. "Improving risk characterisations in practical situations by highlighting knowledge aspects, with applications to risk matrices," Reliability Engineering and System Safety, Elsevier, vol. 167(C), pages 42-48.
    14. Vera Vladimirovna Plenkina & Irina Vladimirovna Osinovskaya, 2018. "Improving the system of labor incentives and stimulation in oil companies," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(2), pages 912-926, December.
    15. Elias Carayannis & Stavros Sindakis & Christian Walter, 2015. "Business Model Innovation as Lever of Organizational Sustainability," The Journal of Technology Transfer, Springer, vol. 40(1), pages 85-104, February.
    16. Christoffersen, Peter, 2011. "Elements of Financial Risk Management," Elsevier Monographs, Elsevier, edition 2, number 9780123744487.
    17. Natalia Kunitsyna & Igor Britchenko & Igor Kunitsyn, 2018. "Reputational risks, value of losses and financial sustainability of commercial banks," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(4), pages 943-955, June.
    18. Caporin, Massimiliano & Fontini, Fulvio, 2017. "The long-run oil–natural gas price relationship and the shale gas revolution," Energy Economics, Elsevier, vol. 64(C), pages 511-519.
    19. Walker, Thomas & Turtle, Harry J. & Pukthuanthong, Kuntara & Thiengtham, Dolruedee, 2015. "Legal opportunism, litigation risk, and IPO underpricing," Journal of Business Research, Elsevier, vol. 68(2), pages 326-340.
    20. Chaibi, Hasna & Ftiti, Zied, 2015. "Credit risk determinants: Evidence from a cross-country study," Research in International Business and Finance, Elsevier, vol. 33(C), pages 1-16.
    21. Christopher L. Culp, 2002. "The Revolution In Corporate Risk Management: A Decade Of Innovations In Process And Products," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(4), pages 8-26, January.
    22. Dianshu, Feng & Sovacool, Benjamin K. & Minh Vu, Khuong, 2010. "The barriers to energy efficiency in China: Assessing household electricity savings and consumer behavior in Liaoning Province," Energy Policy, Elsevier, vol. 38(2), pages 1202-1209, February.
    23. James Henderson & Arild Moe, 2016. "Gazprom’s LNG offensive: a demonstration of monopoly strength or impetus for Russian gas sector reform?," Post-Communist Economies, Taylor & Francis Journals, vol. 28(3), pages 281-299, July.
    24. Kim, Sungjae F. & Chance, Don M., 2018. "An empirical analysis of corporate currency risk management policies and practices," Pacific-Basin Finance Journal, Elsevier, vol. 47(C), pages 109-128.
    25. Hyejun Kim & Jaeyong Song, 2017. "Filling institutional voids in emerging economies: The impact of capital market development and business groups on M&A deal abandonment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 308-323, April.
    26. Aven, Terje, 2016. "Risk assessment and risk management: Review of recent advances on their foundation," European Journal of Operational Research, Elsevier, vol. 253(1), pages 1-13.
    27. Daniel Seifert & Ralf W. Seifert & Olov H.D. Isaksson, 2017. "A test of inventory models with permissible delay in payment," International Journal of Production Research, Taylor & Francis Journals, vol. 55(4), pages 1117-1128, February.
    28. Nadine Gatzert & Joan T. Schmit & Andreas Kolb, 2016. "Assessing the Risks of Insuring Reputation Risk," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(3), pages 641-679, September.
    29. Jonas Mackevičius & Ruta Šneidere & Daiva Tamulevičienė, 2018. "The waves of enterprises bankruptcy and the factors that determine them: the case of Latvia and Lithuania," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(1), pages 100-114, September.
    30. Kai Ma & Shubing Hu & Jie Yang & Chunxia Dou & Josep M. Guerrero, 2017. "Energy Trading and Pricing in Microgrids with Uncertain Energy Supply: A Three-Stage Hierarchical Game Approach," Energies, MDPI, vol. 10(5), pages 1-16, May.
    31. Jonas Mackevičius & Ruta Šneidere & Daiva Tamulevičienė, 2018. "The waves of enterprises bankruptcy and the factors that determine them: the case of Latvia and Lithuania," Post-Print hal-02121037, HAL.
    32. Christian Eckert, 2017. "Corporate reputation and reputation risk," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 18(2), pages 145-158, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Javier Bianchi & Saki Bigio & Charles Engel, 2021. "Scrambling for Dollars: International Liquidity, Banks and Exchange Rates," Working Papers 786, Federal Reserve Bank of Minneapolis.
    2. Fraiberger, Samuel P. & Lee, Do & Puy, Damien & Ranciere, Romain, 2021. "Media sentiment and international asset prices," Journal of International Economics, Elsevier, vol. 133(C).
    3. Mikhail Chernov & Magnus Dahlquist & Lars Lochstoer, 2023. "Pricing Currency Risks," Journal of Finance, American Finance Association, vol. 78(2), pages 693-730, April.
    4. Elminejad, Ali & Havranek, Tomas & Irsova, Zuzana, 2022. "Relative Risk Aversion: A Meta-Analysis," MetaArXiv b8uhe, Center for Open Science.
    5. Kim, Daehwan & Moneta, Fabio, 2021. "Long-term foreign exchange risk premia and inflation risk," International Review of Financial Analysis, Elsevier, vol. 78(C).
    6. Dahlquist, Magnus & Hasseltoft, Henrik, 2020. "Economic momentum and currency returns," Journal of Financial Economics, Elsevier, vol. 136(1), pages 152-167.
    7. Chien, YiLi & Lustig, Hanno & Naknoi, Kanda, 2020. "Why are exchange rates so smooth? A household finance explanation," Journal of Monetary Economics, Elsevier, vol. 112(C), pages 129-144.
    8. Tarek A. Hassan & Tony Zhang, 2021. "The Economics of Currency Risk," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 281-307, August.
    9. Colacito, Riccardo & Riddiough, Steven J. & Sarno, Lucio, 2020. "Business cycles and currency returns," Journal of Financial Economics, Elsevier, vol. 137(3), pages 659-678.
    10. Park, Sunjin, 2022. "Heterogeneous beliefs in macroeconomic growth prospects and the carry risk premium," Journal of Banking & Finance, Elsevier, vol. 136(C).
    11. Elminejad, Ali & Havranek, Tomas & Irsova, Zuzana, 2022. "Relative Risk Aversion: A Meta-Analysis," MetaArXiv b8uhe_v1, Center for Open Science.
    12. Gavazzoni, Federico & Santacreu, Ana Maria, 2020. "International R&D spillovers and asset prices," Journal of Financial Economics, Elsevier, vol. 136(2), pages 330-354.
    13. Hutchinson, Mark C. & Kyziropoulos, Panagiotis E. & O'Brien, John & O'Reilly, Philip & Sharma, Tripti, 2022. "Are carry, momentum and value still there in currencies?," International Review of Financial Analysis, Elsevier, vol. 83(C).
    14. Keles, Dogan & Scelle, Jonathan & Paraschiv, Florentina & Fichtner, Wolf, 2016. "Extended forecast methods for day-ahead electricity spot prices applying artificial neural networks," Applied Energy, Elsevier, vol. 162(C), pages 218-230.
    15. Tarek A. Hassan & Stephan Hollander & Laurence Van Lent & Ahmed Tahoun, 2024. "The Global Impact of Brexit Uncertainty," Journal of Finance, American Finance Association, vol. 79(1), pages 413-458, February.
    16. Corte, Pasquale Della & Kozhan, Roman & Neuberger, Anthony, 2021. "The cross-section of currency volatility premia," Journal of Financial Economics, Elsevier, vol. 139(3), pages 950-970.
    17. Qazi, Abroon, 2023. "Exploring Global Competitiveness Index 4.0 through the lens of country risk," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    18. Morales, Lucía & Hanly, Jim, 2018. "European power markets–A journey towards efficiency," Energy Policy, Elsevier, vol. 116(C), pages 78-85.
    19. Andrews, Spencer & Colacito, Riccardo & Croce, Mariano M. & Gavazzoni, Federico, 2024. "Concealed carry," Journal of Financial Economics, Elsevier, vol. 159(C).
    20. Benth, Fred Espen & Paraschiv, Florentina, 2018. "A space-time random field model for electricity forward prices," Journal of Banking & Finance, Elsevier, vol. 95(C), pages 203-216.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:12:y:2019:i:14:p:2647-:d:247240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.