Journal
ENERGY POLICY
Volume 183, Issue -, Pages -Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2023.113822
Keywords
Microdata; Ownership structure; Prices; Renewable energy policy; Sweden; Tradable green certificates
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This study explores the impact of ownership structure on tradable green certificate (TGC) prices in the Swedish market. The findings reveal that firms with cross-ownership have the ability to differentiate TGC prices, despite the low overall market concentration.
This paper studies the ownership structure among participants in the Swedish tradable green certificate (TGC) system and its implications for TGC prices. First, we investigate cross-ownership - a situation when a firm is active on both the demand and supply sides of the TGC market - by linking suppliers and obliged parties to their parent firms. Next, we calculate indexes of market concentration that account for cross-ownership. Finally, we use detailed TGC transaction-level data to analyze differences in the prices of the TGCs traded by cross-ownership versus non-cross-ownership firms. Our results show considerable cross-ownership, with many firms active on both TGC supply and demand sides. However, even after accounting for cross-ownership, the market concen-tration of the entire TGC market is low and has decreased over time. Despite the absence of market concen-tration, our analysis of TGC prices indicates that cross-ownership firms have the ability to differentiate TGC prices from non-cross-ownership firms. Such behavior is consistent with the behavioral assumption that the ultimate owner's objective is to maximize the total profit of the portfolio of shares, and that, therefore, the pricing behavior would differ from that of a perfectly competitive firm without ownership links to other firms in the industry.
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