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

Authors

DOI:

https://doi.org/10.18041/1900-3803/entramado.2.12885

Keywords:

Financial performance, Energy firms, Multiple factor analysis

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.

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Author Biographies

  • Luisa F. Muñoz-Alzate, University of Valle, Cali - Colombia

    Master's Degree in Engineering with an emphasis on Industrial Engineering from the Universidad del Valle, Cali, Colombia.

  • Orlando Joaqui-Barandica, University of Valle, Cali - Colombia

    Doctor of Engineering with an emphasis in Industrial Engineering from the Universidad del Valle (Cali, Colombia). Assistant professor at the Universidad del Valle, Cali, Colombia.

  • Diego F. Manotas-Duque, University of Valle, Cali - Colombia

    Doctorate in Engineering from the University of Valle and a Master's Degree in Management with an emphasis on Finance. Full professor at the School of Industrial Engineering at the University of Valle, Cali, Colombia.

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Published

2025-07-15

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Vol. 21 No. 2 (2025): Entramado

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RESEARCH PAPERS

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