Analyzing the Greek renewable energy sector: A Data Envelopment Analysis approach

Abstract

This paper applies a bootstrapped Data Envelopment Analysis (DEA) formulation aiming to evaluate the financial performance of the firms operating in the Greek renewable energy sector. With the use of financial ratios in a DEA setting, efficiency ratios are constructed in order to analyse firms' financial performance. The results reveal that firms' performances are positively influenced by the high levels of return on assets and equity and by lower levels of debt to equity. In addition it appears that there are not significant differences of firms' efficiency levels indicating high competitiveness between firms. Finally, firms producing wind energy appear to perform better than firms producing hydropower energy. It emerges that the majority of firms are operating in the wind and hydropower energy production making the Greek market of solar energy production being an emerging segment of the Greek renewable energy sector. (C) 2012 Elsevier Ltd. All rights reserved.