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Effect of the COVID-19 Pandemic on Renewable Energy Firm’s Profitability and Capitalization

Author

Listed:
  • Zaffar Ahmed Shaikh

    (Faculty of Computer Science & Information Technology, Benazir Bhutto Shaheed University Lyari, Karachi 75660, Pakistan)

  • Polina Datsyuk

    (Financial Faculty, Financial University under the Government of the Russian Federation, 124167 Moscow, Russia)

  • Laura M. Baitenova

    (Digital Engineering and Data Analysis Department, Almaty University of Power Engineering and Telecommunications (AUPET) Named after G. Daukeev, Almaty 050013, Kazakhstan)

  • Larisa Belinskaja

    (Business Department, Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania)

  • Natalia Ivolgina

    (Department of Finance and Prices, Plekhanov Russian University of Economics, 115903 Moscow, Russia)

  • Gulmira Rysmakhanova

    (Department of Economics and Management, Korkyt Ata Kyzylorda University, Kyzylorda 120000, Kazakhstan)

  • Tomonobu Senjyu

    (Department of Electrical and Electronics Engineering, University of the Ryukyus, Okinawa 903-0213, Japan)

Abstract

The COVID-19 pandemic has led many governments to impose restrictive measures that have contributed to a decline in the demand for goods and services, leading to an economic crisis. This study proves a novelty that implies a rise in the capitalization of renewable energy companies during the coronavirus pandemic. The study is based on the hypothesis that, at a time of economic crisis, the prospect of investing in clean energy has increased, through the need to protect the environment and ensure clean air. The analysis provided additional results that there is an inverse relationship between two economic indicators of firms, namely, the percentage change in profitability and capitalization of firms between 2020 and 2021. Analysis of data from companies included in TRBC Industry Name Renewable Fuels provided numerical results that show an average increase in firms’ capitalization of 86%. The study uses analysis techniques such as covariance and correlation. The results show an increase in capitalization of renewable energy companies by 150%, while there is a decrease in income by 2%. However, the capitalization of fossil fuel companies has increased, with an average growth rate of 35%. This situation in the fossil energy market is that company revenues fell by 32% while capitalization increased by 35%. It proves a bubble in the non-renewable energy market. This paper suggests that the period of coronavirus infection has seen a slowdown in economic growth in many countries around the world, but a switch to renewable energy will help improve the quality of life of the population and ensure economic growth.

Suggested Citation

  • Zaffar Ahmed Shaikh & Polina Datsyuk & Laura M. Baitenova & Larisa Belinskaja & Natalia Ivolgina & Gulmira Rysmakhanova & Tomonobu Senjyu, 2022. "Effect of the COVID-19 Pandemic on Renewable Energy Firm’s Profitability and Capitalization," Sustainability, MDPI, vol. 14(11), pages 1-15, June.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:11:p:6870-:d:831686
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    Cited by:

    1. Wei, Jia & Wen, Jun & Wang, Xiao-Yang & Ma, Jie & Chang, Chun-Ping, 2023. "Green innovation, natural extreme events, and energy transition: Evidence from Asia-Pacific economies," Energy Economics, Elsevier, vol. 121(C).
    2. Anis Ali, 2022. "Pre and Post COVID-19 Disparity of Financial Performance of Oil and Gas Firms: An Absolute and Relational Study," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 396-403, November.

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