Do economic and societal factors influence the financial performance of alternative energy firms?

- We analyse the financial performance of renewable firms from 26 countries.
- Economic and societal factors are important determinants of the financial performance.
- Renewable firms perform better when technology and innovation are well developed.
- National cultural dimensions also impact financial performance of renewable firms.

Prior studies find that the technology sector and oil prices strongly influence the financial performance of alternative energy firms. The results, however, are country-specific and the role of country-level determinants is yet to be investigated. We argue that economic and societal factors are important in explaining cross-country differences in the financial performance of alternative energy firms. We analyse the financial performance of alternative energy firms using firm-level data from 26 countries. We find that the market rewards alternative energy firms when country-level technology and innovation are well developed. Additionally, we find that national cultural dimensions explain cross-country differences in the financial performance of alternative energy firms.