Financial resilience of electricity sector companies in emerging and developed economies: a comparative analysis during times of distress

Orlando Joaqui-Barandica; Diego F. Manotas-Duque; Oscar W. Orozco-Cerón; Orlando Joaqui-Barandica; Diego F. Manotas-Duque; Oscar W. Orozco-Cerón

doi:10.3934/QFE.2026011

Quantitative Finance and Economics

2026, Volume 10, Issue 2: 245-269. doi: 10.3934/QFE.2026011

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Research article

Financial resilience of electricity sector companies in emerging and developed economies: a comparative analysis during times of distress

1.
School of Industrial Engineering, Universidad del Valle, 760001 Cali, Colombia
2.
Department of Economics and Finance, Pontificia Universidad Javeriana, 760001 Cali, Colombia

Received: 14 October 2025 Revised: 11 December 2025 Accepted: 13 January 2026 Published: 17 April 2026
JEL Codes: G32, L94, C38, Q43, F65

This study delved into the determinants of the financial performance of energy firms in both developed and prominent emerging markets, employing a comparative lens. By examining companies within the electric power generation, transmission, and distribution sectors in BRICS and G7 markets throughout the years 2018–2022, including the disruptive COVID-19 period, we leveraged the dual multiple factor analysis (DMFA) technique. Our analysis uncovered four key dimensions—asset-to-debt ratios, operational profitability, liquidity, and the interplay between growth and financial stability—providing clarity on over 65% of the sector's financial dynamics. Our primary findings underscore discernible heterogeneity and emphasize the heightened resilience demonstrated by G7 firms, particularly during the pandemic era. The implications of these disparities carry significant economic and financial ramifications for both groups, influencing their response and recovery mechanisms in the face of disruptive shocks.
- BRICS,
- Covid-19,
- electric power sector,
- factor analysis,
- financial dynamics,
- G7
Citation: Orlando Joaqui-Barandica, Diego F. Manotas-Duque, Oscar W. Orozco-Cerón. Financial resilience of electricity sector companies in emerging and developed economies: a comparative analysis during times of distress[J]. Quantitative Finance and Economics, 2026, 10(2): 245-269. doi: 10.3934/QFE.2026011

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Abstract

This study delved into the determinants of the financial performance of energy firms in both developed and prominent emerging markets, employing a comparative lens. By examining companies within the electric power generation, transmission, and distribution sectors in BRICS and G7 markets throughout the years 2018–2022, including the disruptive COVID-19 period, we leveraged the dual multiple factor analysis (DMFA) technique. Our analysis uncovered four key dimensions—asset-to-debt ratios, operational profitability, liquidity, and the interplay between growth and financial stability—providing clarity on over 65% of the sector's financial dynamics. Our primary findings underscore discernible heterogeneity and emphasize the heightened resilience demonstrated by G7 firms, particularly during the pandemic era. The implications of these disparities carry significant economic and financial ramifications for both groups, influencing their response and recovery mechanisms in the face of disruptive shocks.

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