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.
