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Macroeconomic drivers of financial performance in power generation firms across emerging and developed marketsERATION FIRMS ACROSS EMERGING AND DEVELOPED MARKETS

Year: 2025

Type: article

Abstract: This study examines the impact of macroeconomic factors on the financial performance of power generation firms, comparing emerging Latin American economies with those of a developed market. Based on panel data from 106 companies across six countries (2018–2022), multilevel modeling is used to assess firm- and country-level effects, complemented by Dual Multiple Factor Analysis (DMFA) to identify latent relationships among financial and macroeconomic variables. The results indicate that exchange rate fluctuations and inflation are significant determinants of return on equity (ROE), with coefficients of 0.57 and −0.32, respectively. Internal indicators, such as gross profit margin (β = 0.30) and quick ratio (β = 0.22), also exhibit strong positive associations with ROE. Differences in macroeconomic sensitivity between developed and emerging markets underscore the importance of context-specific financial strategies in the energy sector.

Source: ENTRAMADO

DOI: 10.18041/1900-3803/entramado.2.12885

Authors: Luisa F. Muñoz-Alzate, Orlando Joaqui-Barandica, Diego F. Manotas-Duque

Institution: Universidad del Valle

Language: English

Topic: Financial Analysis and Corporate Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Affordable and clean energy, Industry, innovation and infrastructure

Open Access status: diamond

OpenAlex ID: W4414911360

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