Internationalisation in Modern Electricity Markets: A Quantitative Analysis of the Multinational Enterprise

Joakim Rønnest Sørensen & Michael Kjær Jørgensen

Student thesis: Master thesis


Since the end of the 20thcentury, the world’s electricity markets have been subjectto substantial liberalisation through privatisation and deregulation. The tradi-tional and vertically integrated power systems operated by monopolies, have beendissolved to facilitate more competitive market structures. As electricity marketshave been opened for foreign market entry, electricity producing firms have beenincentivised to adapt their business models to international competition to retainprofits under these new realities. This study explores whether electricity producingfirms have reacted to the market changes and penetrated markets outside of theirnational market during 2006-2015, and whether the pattern is predominantly re-gional or global. In accordance with theoretical assumptions about MultinationalEnterprises, we further investigate the degree to which geographical internationali-sation choices are related to superior firm performance.Our results show that foreign market penetration of electricity producing firms hasbeen driven by Regional Internationalisation and not Global Internationalisation.However, statistical regression analysis showed that Regional Internationalisationstrategies have not transformed into superior performance as stipulated by theo-retical assumptions. These findings led us to conclude that electricity producingfirms have had a preference towards Regional Internationalisation during 2006-2015even as the strategy has not manifested itself in terms of superior performance ofthe firm. This paradoxicality leads us to question the causal relationship betweenInternationalisation and performance within the boundaries of the industry-specificarea of research

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
Publication date2018
Number of pages145
SupervisorsMads Dagnis Jensen