Is Investing in Companies Manufacturing Solar Components a Lucrative Business? A Decision Tree Based Analysis

Tomczak, Sebastian Klaudiusz, Skowrońska-Szmer, Anna and Szczygielski, Kuba (2020) Is Investing in Companies Manufacturing Solar Components a Lucrative Business? A Decision Tree Based Analysis. Energies, 13 (2). p. 499. ISSN 1996-1073

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Official URL: https://doi.org/10.3390/en13020499

Abstract

In an era of increasing energy production from renewable sources, the demand for components for renewable energy systems has dramatically increased. Consequently, managers and investors are interested in knowing whether a company associated with the semiconductor and related device manufacturing sector, especially the photovoltaic (PV) systems manufacturers, is a money-making business. We apply a new approach that extends prior research by applying decision trees (DTs) to identify ratios (i.e., indicators), which discriminate between companies within the sector that do (designated as “green”) and do not (“red”) produce elements of PV systems. Our results indicate that on the basis of selected ratios, green companies can be distinguished from the red companies without an in-depth analysis of the product portfolio. We also find that green companies, especially operating in China are characterized by lower financial performance, thus providing a negative (and unexpected) answer to the question posed in the title.

Item Type: Article
Uncontrolled Keywords: CHAID; CRT; QUEST models; manufacturing companies; renewable energy sources; financial ratios
Subjects: N100 Business studies
N300 Finance
N400 Accounting
Department: Faculties > Business and Law > Newcastle Business School
Depositing User: Elena Carlaw
Date Deposited: 23 Jun 2020 08:59
Last Modified: 23 Jun 2020 09:03
URI: http://nrl.northumbria.ac.uk/id/eprint/43545

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