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unige:97517 
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Make it strategic! Financial investment logic is not enough |
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| Published in | Energy Efficiency. 2011, vol. 4, no. 4, p. 473-492 | |
| Abstract | Profitability is not the main driver of capital investment decision-making; financial evaluation tools often play a secondary role in corporate investment choices; businesses do not follow capital finance theory prescriptions, contrary to what mainstream claims; the strategic character of investments has a heavier decisional weight than profitability. These findings are based on a review of different streams of literature (mainly organizational finance and strategic decision-making) which is described in the second part of the paper, after a first part summarizing the main stances of mainstream energy economics and the main findings of the alternative literature on energy-efficiency investments. Yet, what is a strategic investment? To fill the existing conceptual gap, we propose a definition of strategic investment and a new theoretical framework to analyze investment projects. An example of applying this framework to an energy-efficiency project is described. The partial influence of financial factors and the importance of strategic factors in investment decisions entail several implications for energy-efficiency practitioners, scholars, and public program developers, which are described in the last part of the paper. | |
| Keywords | Energy-efficiency gap — Investment decision-making — Capital budgeting tools — Strategic investment — Barriers to energy efficiency — Indirect benefits of energy efficiency — Public policy | |
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Article (Published version) (395 Kb) - Limited access to UNIGE Other version: http://link.springer.com/10.1007/s12053-011-9125-7 |
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| Structures | ||
| Research groups | Systèmes énergétiques ISE Pôle Sciences | |
| Citation (ISO format) | COOREMANS, Catherine. Make it strategic! Financial investment logic is not enough. In: Energy Efficiency, 2011, vol. 4, n° 4, p. 473-492. https://archive-ouverte.unige.ch/unige:97517 |
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