*3.1. Results for the SME Cohort*

The results for the SME cohort are presented in Table 4. The results from the Hausman test (at the 5% significance level) imply that individual effects are present in the data and that the FE estimator should be used.

The company determinants appear significant mostly when profitability is measured with ROA and ROCE. Net income (Netincome), controlling for the nominator in the profitability ratios, is significant and positive in all six tests, with a small effect on profitability as expected (around 0.055, see Table A1). Company size in sales (LOG\_Sales) is statistically significant and positive in three out of six of the tests, with a larger effect on profitability when measured with ROA and ROCE (3.890, 8.081, 6.959) but the effect is non-significant on ROE. Size in Assets (LOG\_Assets) is statistically significant only at the 10% level in one of the tests (3.658). Liquidity (CurrentRatio) is significant at the 10% level in three of the tests and positive with a small effect on ROA and ROCE (0.649, 0.580, 0.574) and Leverage (D\_A) is significant at the 5% level once with a large negative effect on ROCE (−4.131). Growth in sales (Sales\_G) is significant at the 10% level with a positive effect on ROA (0.013). Growth in assets (Assets\_G) is not significant in any of the tests (see Table A1).


**Table 4.** Summary of FE model results for both the SMEs and large firms. Legend: +: positive relationship; −: negative relationship, \*\*\*: significance level 1%; \*\*: significance level 5%, \*: significance level 10%, Ns: not significant.

> Among the industry determinants, the variables proxying for the industry growth are significant at the 5% level. These include Change in the Electricity Consumption (ElecCons\_G) with a moderate (−1.343, −0.607, −0.398, −0.646, −0.486) negative effect in five out of the six tests and Change in the share of RE in the overall electricity consumption (Elecreshare\_G) in three out of the six tests, with a smaller positive effect (0.316, 0.081, 0.114) on profitability. The change in the market concentration a.k.a. the market share of the largest generator in the market (Marketconcentration\_G) is significant at the 5% level in five out of the six tests, with a small or moderate positive effect (0.438, 0.343, 0.122, 0.178, 0.061). The GDP growth rate (GDPG) is once significant at the 5% level with a positive (0.146) effect on ROA. The annual average Feed-in Tariffs across the RE sectors is significant at the 5% level in five out of the six tests with a very large negative effect on profitability (−162.8, −110.8, −46.6, −30.4, −52.5) (see Table A1).

> This significant and large effect is explained by the unlikeliness of the one unit rise in the independent variable as the average FIT range in these data is from 0.11 to 0.19.
