IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i3p1021-d1038738.html
   My bibliography  Save this article

Impact of Investments and R&D Costs in Renewable Energy Technologies on Companies’ Profitability Indicators: Assessment and Forecast

Author

Listed:
  • Olha Prokopenko

    (Estonian Entrepreneurship University of Applied Sciences, 11415 Tallinn, Estonia
    Economics Department, Collegium Mazovia Innovative University, 08-110 Siedlce, Poland
    Department of Business Economics and Administration, Sumy State Makarenko Pedagogical University, 40000 Sumy, Ukraine)

  • Tetiana Kurbatova

    (Science Policy Research Unit, University of Sussex Business School, University of Sussex, Brighton BN1 9RH, UK
    International Economic Relations Department, Sumy State University, 40007 Sumy, Ukraine)

  • Marina Khalilova

    (Department of Monitoring and Quality, International University of Kyrgyzstan, Bishkek 720007, Kyrgyzstan)

  • Anastasiia Zerkal

    (Department of Marketing and Logistics, Zaporizhzhia Polytechnic National University, 69063 Zaporizhzhia, Ukraine)

  • Gunnar Prause

    (Wismar Business School, Wismar University, 23966 Wismar, Germany
    Department of Business Administration, Tallinn University of Technology, 12616 Tallinn, Estonia)

  • Jacek Binda

    (Department of Social and Technical Sciences, Bielsko-Biała School of Finance and Law, 43-382 Bielsko-Biala, Poland)

  • Temur Berdiyorov

    (Department of Economics and Management, Jizzakh Polytechnic Institute, Jizzakh 130100, Uzbekistan)

  • Yuriy Klapkiv

    (Department of Insurance, Institute of Finance, Faculty of Economics and Sociology, University of Lodz, 90-136 Lodz, Poland)

  • Sabina Sanetra-Półgrabi

    (Department of Administration and Public Policy, Pedagogical University of Krakow, 30-084 Krakow, Poland)

  • Igor Komarnitskyi

    (Faculty of the Hotel, Restaurant and Tourism Business, Kyiv National University of Culture and Arts, 01601 Kyiv, Ukraine)

Abstract

Renewable energy technologies play a crucial role in solving global energy and environmental issues, and the pace of the energy transition directly depends on improving their efficiency. Presently, the development and implementation of renewable energy systems are ensured mainly through state funding, the possibilities of which are limited. The potential of attracting private investments depends directly on their impact on companies’ profitability indicators, and the uncertainty regarding the return on investments is one of the main barriers affecting investors’ decision-making. Based on a vector autoregressive model for analysing the stationary time series, the paper explores the impact of long-term investments and research and development costs in renewable energy technologies on the financial performance of ten of the largest companies operating in this field. The study’s results showed that investments and spending on research and development positively affect such companies’ profitability indicators as earnings before interest, taxes, depreciation and amortisation, earnings before interest and tax, net income, and return on investment. The obtained results can be used to substantiate the economic effectiveness of investments in developing and improving renewable energy technologies when forming the companies’ financial policies to support them.

Suggested Citation

  • Olha Prokopenko & Tetiana Kurbatova & Marina Khalilova & Anastasiia Zerkal & Gunnar Prause & Jacek Binda & Temur Berdiyorov & Yuriy Klapkiv & Sabina Sanetra-Półgrabi & Igor Komarnitskyi, 2023. "Impact of Investments and R&D Costs in Renewable Energy Technologies on Companies’ Profitability Indicators: Assessment and Forecast," Energies, MDPI, vol. 16(3), pages 1-17, January.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:3:p:1021-:d:1038738
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/3/1021/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/3/1021/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hailemariam, Abebe & Ivanovski, Kris & Dzhumashev, Ratbek, 2022. "Does R&D investment in renewable energy technologies reduce greenhouse gas emissions?," Applied Energy, Elsevier, vol. 327(C).
    2. Chen, Huangxin & Shi, Yi & Zhao, Xin, 2022. "Investment in renewable energy resources, sustainable financial inclusion and energy efficiency: A case of US economy," Resources Policy, Elsevier, vol. 77(C).
    3. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    4. Bohuslava Mihalčová & Antonín Korauš & Olha Prokopenko & Jozefína Hvastová & Magdaléna Freňáková & Peter Gallo & Beáta Balogová, 2021. "Effective Management Tools for Solving the Problem of Poverty in Relation to Food Waste in Context of Integrated Management of Energy," Energies, MDPI, vol. 14(14), pages 1-18, July.
    5. Wang, Baixun & Zhao, Wenjuan, 2022. "Interplay of renewable energy investment efficiency, shareholder control and green financial development in China," Renewable Energy, Elsevier, vol. 199(C), pages 192-203.
    6. Liu, Fengyu & Feng, Jue & Zhai, Ge & Razzaq, Asif, 2022. "Influence of fiscal decentralization and renewable energy investment on ecological sustainability in EU: What is the moderating role of institutional governance?," Renewable Energy, Elsevier, vol. 200(C), pages 1265-1274.
    7. Rausser, Gordon C. & Papineau, Maya, 2008. "Managing R&D Risk in Renewable Energy," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt41j9f6ks, Department of Agricultural & Resource Economics, UC Berkeley.
    8. Zhang, Yajun, 2022. "How Economic Performance of OECD economies influences through Green Finance and Renewable Energy Investment Resources?," Resources Policy, Elsevier, vol. 79(C).
    9. Castrejon-Campos, Omar & Aye, Lu & Hui, Felix Kin Peng & Vaz-Serra, Paulo, 2022. "Economic and environmental impacts of public investment in clean energy RD&D," Energy Policy, Elsevier, vol. 168(C).
    10. Taliat Bielialov, 2022. "Risk Management of Startups of Innovative Products," JRFM, MDPI, vol. 15(5), pages 1-20, April.
    11. Iryna Sotnyk & Tetiana Kurbatova & Oleksandr Kubatko & Olha Prokopenko & Gunnar Prause & Yevhen Kovalenko & Galyna Trypolska & Uliana Pysmenna, 2021. "Energy Security Assessment of Emerging Economies under Global and Local Challenges," Energies, MDPI, vol. 14(18), pages 1-20, September.
    12. Zhang, Dongyang & Mohsin, Muhammad & Taghizadeh-Hesary, Farhad, 2022. "Does green finance counteract the climate change mitigation: Asymmetric effect of renewable energy investment and R&D," Energy Economics, Elsevier, vol. 113(C).
    13. Antonín Korauš & Miroslav Gombár & Alena Vagaská & Stanislav Šišulák & Filip Černák, 2021. "Secondary Energy Sources and Their Optimization in the Context of the Tax Gap on Petrol and Diesel," Energies, MDPI, vol. 14(14), pages 1-22, July.
    14. Nestor Shpak & Solomiya Ohinok & Ihor Kulyniak & Włodzimierz Sroka & Yuriy Fedun & Romualdas Ginevičius & Joanna Cygler, 2022. "CO 2 Emissions and Macroeconomic Indicators: Analysis of the Most Polluted Regions in the World," Energies, MDPI, vol. 15(8), pages 1-22, April.
    15. Nestor SHPAK & Ihor KULYNIAK & Maryana GVOZD & Olga PYROG & Wlodzimierz SROKA, 2021. "Shadow Economy And Its Impact On The Public Administration: Aspects Of Financial And Economic Security Of The Country'S Industry," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2021(36), pages 81-101, June.
    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. Hayat, Sikandar & Safi, Adnan & Wahab, Salman & Shahzad, Khurram & Chen, Yingying, 2023. "Renewable energy R&D and natural resources: A success story of environmentally friendly financing in OECD economies," Resources Policy, Elsevier, vol. 83(C).
    2. Iryna Sotnyk & Tetiana Kurbatova & Yaroslavna Romaniuk & Olha Prokopenko & Viktoriya Gonchar & Yuriy Sayenko & Gunnar Prause & Aleksander Sapiński, 2022. "Determining the Optimal Directions of Investment in Regional Renewable Energy Development," Energies, MDPI, vol. 15(10), pages 1-26, May.
    3. Chen, Xia & Zhang, Huimin & Zhao, Xin Xin & Gong, Qiang & Chang, Chun-Ping, 2024. "Do renewable energy investment and financial development mitigate climate change?," Journal of Asian Economics, Elsevier, vol. 93(C).
    4. Luiz Gustavo Antonio Souza & Márcia Azanha Ferraz Dias Moraes & Maria Ester Soares Dal Poz & José Maria Ferreira Jardim Silveira, 2015. "Collaborative Networks as a measure of the Innovation Systems in second-generation ethanol," Scientometrics, Springer;Akadémiai Kiadó, vol. 103(2), pages 355-372, May.
    5. Miroslav Gombár & Antonín Korauš & Alena Vagaská & Štefan Tóth, 2022. "Analytical View on the Sustainable Development of Tax and Customs Administration in the Context of Selected Groups of the Population of the Slovak Republic," Sustainability, MDPI, vol. 14(3), pages 1-22, February.
    6. Wang, Yang & Taghizadeh-Hesary, Farhad, 2023. "Green bonds markets and renewable energy development: Policy integration for achieving carbon neutrality," Energy Economics, Elsevier, vol. 123(C).
    7. Zhang, Xu & Wang, Pengmian & Xu, Qiuxiang, 2024. "Corporate environmental governance under the coordination of fiscal and financial policies: The case of green credit subsidy policy," Finance Research Letters, Elsevier, vol. 64(C).
    8. Mac Clay, Pablo & Börner, Jan & Sellare, Jorge, 2023. "Institutional and macroeconomic stability mediate the effect of auctions on renewable energy capacity," Energy Policy, Elsevier, vol. 180(C).
    9. Qadri, Hussain Mohi ud Din & Ali, Hassnian & Abideen, Zain ul & Jafar, Ahmad, 2024. "Mapping the Evolution of Green Finance Research and Development in Emerging Green Economies," Resources Policy, Elsevier, vol. 91(C).
    10. Hossain, Mohammad Razib & Singh, Sanjeet & Sharma, Gagan Deep & Apostu, Simona-Andreea & Bansal, Pooja, 2023. "Overcoming the shock of energy depletion for energy policy? Tracing the missing link between energy depletion, renewable energy development and decarbonization in the USA," Energy Policy, Elsevier, vol. 174(C).
    11. Ray, Manojit & Chakraborty, Basab, 2022. "Impact of demand flexibility and tiered resilience on solar photovoltaic adoption in humanitarian settlements," Renewable Energy, Elsevier, vol. 193(C), pages 895-912.
    12. Trivedi, Jatin & Chakraborty, Dipanwita & Nobanee, Haitham, 2023. "Modelling the growth dynamics of sustainable renewable energy – Flourishing green financing," Energy Policy, Elsevier, vol. 183(C).
    13. Mara Madaleno & Manuel Carlos Nogueira, 2023. "How Renewable Energy and CO 2 Emissions Contribute to Economic Growth, and Sustainability—An Extensive Analysis," Sustainability, MDPI, vol. 15(5), pages 1-15, February.
    14. Zhang, Dongyang, 2023. "Does green finance really inhibit extreme hypocritical ESG risk? A greenwashing perspective exploration," Energy Economics, Elsevier, vol. 121(C).
    15. Li, Wenxue & Liu, Fei, 2023. "Financing green resource generation in sub-saharan Africa: Does financial integration matter?," Resources Policy, Elsevier, vol. 85(PB).
    16. Johan Lilliestam & Anthony Patt & Germán Bersalli, 2022. "On the quality of emission reductions: observed effects of carbon pricing on investments, innovation, and operational shifts. A response to van den Bergh and Savin (2021)," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(3), pages 733-758, November.
    17. Sarah Armitage & Noël Bakhtian & Adam Jaffe, 2024. "Innovation Market Failures and the Design of New Climate Policy Instruments," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 5(1), pages 4-48.
    18. Polzin, Friedemann & Sanders, Mark & Serebriakova, Alexandra, 2021. "Finance in global transition scenarios: Mapping investments by technology into finance needs by source," Energy Economics, Elsevier, vol. 99(C).
    19. Xiaohua Sun & Danish Khan & Yubai Zheng, 2024. "Articulating the Role of Technological Innovation and Policy Uncertainty in Energy Efficiency: an Empirical Investigation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 14597-14616, September.
    20. Waidelich, Paul & Steffen, Bjarne, 2024. "Renewable energy financing by state investment banks: Evidence from OECD countries," Energy Economics, Elsevier, vol. 132(C).

    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:16:y:2023:i:3:p:1021-:d:1038738. 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.