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Do the strategic decisions of multinational energy companies differ in divergent market contexts?: An exploratory study
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Sustainability and Industrial Dynamics.ORCID iD: 0000-0003-3146-2307
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Sustainability and Industrial Dynamics.ORCID iD: 0000-0003-1226-2799
Universidad Politecnica de Madrid.
2016 (English)In: Energy Research & Social Science, ISSN 2214-6296, E-ISSN 2214-6326, Vol. 11, 9-18 p.Article in journal, News item (Refereed) Published
Abstract [en]

In the European energy industry, different countries’ national institutional frameworks have evolved divergently in response to increasing concerns about environmental issues. This paper explores the influence of these divergent national institutional frameworks on the strategic behavior of multinational company (MNC) subsidiaries. Differences in MNC subsidiaries’ strategic decisions in different countries, regardless of common capabilities and strategies, illustrate the importance of this influence. The paper focuses on the strategic decisions that determine which energy technology MNCs choose to acquire or invest in. MNCs are the predominant force in the European energy industry, and our understanding of their strategic decisions regarding choice of technology is an essential step in achieving a low-carbon energy industry. Our analysis is based on a longitudinal case study of Vattenfall, a Swedish multinational energy company. Findings confirm that even in the energy industry—a capital-intensive, national, and institution-based industry—MNCs follow their core global strategy to such an extent that it may prevail over local institutional considerations. Nevertheless, as European energy markets become deregulated and renewable energy matures, local institutions are likely to play a more dominant role, and MNCs will increasingly need to comply with local institutions’ guidelines. The paper offers recommendations for policymakers and several managerial implications.

Place, publisher, year, edition, pages
Elsevier, 2016. Vol. 11, 9-18 p.
Keyword [en]
Multinational energy companies, Strategic responses, Institutions, Climate concerns
National Category
Social Sciences
Research subject
Energy Technology
URN: urn:nbn:se:kth:diva-177457DOI: 10.1016/j.erss.2015.08.009ISI: 000379430400002ScopusID: 2-s2.0-84941921028OAI: diva2:872870

QC 20151202

Available from: 2015-11-20 Created: 2015-11-20 Last updated: 2016-08-12Bibliographically approved
In thesis
1. Who is in the driver's seat?: Insights into the mixed outcomes of renewable policy instruments in the electricity industry
Open this publication in new window or tab >>Who is in the driver's seat?: Insights into the mixed outcomes of renewable policy instruments in the electricity industry
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

There is consensus about a need to reduce the amount of green-house gas emission in the electricity industry to be able to deal with the probable consequences of climate change. This necessitates extensive investments in technologies used to generate electricity from renewable energy sources (RES-E). To stimulate such investments, governments have enacted several policy instruments. However, the outcomes of these instruments are mixed. This thesis delineates two reasons for the different effects of policies. First, the development of the renewable electricity industry hinges on a set of driving forces that differ across regions, through the years and for different actors. Given that, policy instruments are not only driving forces behind the renewable electricity industry and can thus by themselves not explain its development.

Second, RES-E investors comprise a heterogeneous group of actors whose perceptions of business opportunities vary substantially and are also based on a variety of driving forces. Hence, RES-E investors may react differently to changes within the electricity industry, as well as to government policies that aim to create a more sustainable electricity industry. Garnering a better understanding of these reactions is therefore important as they influence the pace of transition to a more sustainable electricity industry.

This is an interdisciplinary study that brings together several theories and research areas. First, using the technological innovation system perspective, it identifies systemic driving forces behind the development of the renewable energy industry that will also accelerate the electricity industry transitions to sustainability. To gain a better insight into the role of policy instruments as such as well as in relation to other driving forces, this thesis explores what factors are accounted for in attempts to assess the instruments’ performance. Second, drawing on sustainability transition studies and dynamic capability theories, this thesis seeks to explore which firms are willing to contribute—and capable of contributing—to sustainability transitions in the electricity industry. The thesis argues that good forecast and policy plans need to be built on a solid understanding of the firms that change the structure of the electricity industry through their RES-E investments.

This thesis leverages a mix of qualitative and quantitative methods. Empirical data are collected through two extensive literature reviews on the driving forces of the renewable energy industry development in Europe, a longitudinal case study on a European multinational energy company, and statistical analyses of data on RES-E investors in Sweden. The thesis makes theoretical, methodological, and empirical contributions to this area of research. The findings explain what motivates the development of the renewable energy industry; who competes in the renewable electricity industry; and what the future renewable electricity industry may look like. The thesis outlines implications for policies, for managers as well as for renewable energy technologies. 

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2015. xi, 115 p.
TRITA-IEO, ISSN 1100-7982 ; 2015:12
Electricity from renewable energy sources, sustainability transitions, actors, institutions, dynamic capabilities, energy policy, investors, technological innovation system
National Category
Other Social Sciences not elsewhere specified
Research subject
Energy Technology; Industrial Engineering and Management
urn:nbn:se:kth:diva-179723 (URN)978-91-7595-814-9 (ISBN)
Public defence
2016-02-12, F3, Lindstedtsvägen 26, KTH, Stockholm, 09:00 (English)

This research was conducted within the framework of the “European Doctorate in Industrial Management” - EDIM - which is funded by The Education, Audiovisual and Culture Executive Agency (EACEA) of European Commission under Erasmus Mundus Action 1 programme. 

QC 20160119

Available from: 2016-01-19 Created: 2015-12-22 Last updated: 2016-02-12Bibliographically approved

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