Drivers of Firms’ Financial Performance in the Energy Sector: A Comparative Approach between the Conventional and Renewable Energy Fields

Abstract

Given the sizeable importance of companies from the energy sector, and the economic, social, and environmental implications generated by their activity, an in-depth assessment of the relationship between financial performance and Corporate Social Responsibility (CSR) initiatives becomes essential for this sector. In this paper, we investigate the shaping factors of the financial performance of companies in the energy field, with a particular focus on the renewable energy sector, in a comparative approach with the conventional ones. The data were gathered from the Refinitiv Eikon database. The methodology applied consists of several advanced econometric procedures, namely robust regression and structural equation modelling. Our findings bring to the fore the distinctiveness of the main drivers of financial performance of companies from the renewable energy sector, compared with the conventional ones, for which specific policies and strategies are needed to comply with the CSR dimensions, as predictors of financial performance in the energy sector.