Green Financing and Energy Innovation Driving Firm Performance in Southeast Asian Energy Firms (Aptisi Transactions On Technopreneurship (ATT))

Summary

• The research analyzes the financial performance of energy companies in Southeast Asia based on secondary data observed across 170 entities.p.7
• Fixed Effect Model regression shows that Fiscal Incentives for Renewable Energy Investment (FIREI) exhibits a significant negative coefficient of -0.0844436 on Return on Assets (ROA) in Model M4.p.9
• Renewable Energy Investment (REITI) carries a negative coefficient of -0.0964505 in Model 6, showing that upfront investments can reduce short-term profitability.p.9
• Green Financing (GFTF) records a negative coefficient of -0.1295448 in Model M8 at a 1% significance level.p.9
• The research was funded by the Indonesian Ministry of Higher Education, Science and Technology under contract No. 4319/B3/DT.03.08/2025.p.15

Key insights

1. Renewable energy investments often lower short-term Return on Assets due to high initial capital requirements and extended payback periods.p.4
2. Transparent carbon emission disclosures enhance corporate reputation and reduce information asymmetry, leading to better financial performance.p.12
3. Fiscal incentives for renewable energy can unexpectedly suppress short-term ROA by creating market distortions or encouraging investment in less profitable projects.p.10
4. Green energy market demand growth does not yield immediate financial benefits owing to increased competition and operational capacity constraints.p.10
5. Debt-to-Equity Ratio consistently exerts a negative impact on ROA by elevating financial risk.p.13
6. Higher financial leverage can mitigate the negative short-term impact of renewable energy investments on profitability.p.10
7. Dividend policy does not significantly alter or moderate the financial outcomes of corporate sustainability investments.p.11
8. The Hausman test rejected the Random Effects model in favor of the Fixed Effects model due to correlation between unobserved firm effects and independent variables.p.8