Interregional Comparability of Operating Conditions for Industry Businesses
DOI:
https://doi.org/10.17059/ekon.reg.2026-2-15Keywords:
institutional investors, global regional associations, Big3, IFRS, energy sector, marginality, market capitalization, investment incomeAbstract
This study investigates how capital markets evaluate energy sector companies across different global regional associations. It aims to identify the regional distribution of marginality in the energy sector and assess whether operating conditions are comparable for single-industry companies located in various global economic regions. The analysis is based on market capitalization data and marginality indicators derived from official corporate reports of leading publicly listed energy companies. The assessment covers four and nine global regional associations, as defined by World Bank methodology. Multivariate regression analysis reveals statistically significant differences in marginality levels (six levels on a ten-point scale, with probabilities of 0.92 for the upper bound and 0.31 for the lower bound) among industry participants in the CIS, China, the Middle East, and OECD core economies. The findings support the hypothesis of a weak relationship between marginality and market capitalization. Companies in non-Western economies are also found to exhibit higher marginality compared to their Western counterparts. The prevalence of stock market income in OECD core economies ensures high sectoral capitalization for firms in these regions, regardless of actual performance. Investors tend to expect operational efficiency and dividend payouts from companies in developed non-Western economies, while capital gains or high capitalization are expected from Western economies. These differing expectations create varying financial pressures on firms. In conclusion, sector-specific companies in the CIS and the Middle East demonstrate higher efficiency and investment attractiveness. These results highlight the need to revise criteria for peer-group comparisons and to strengthen regulatory oversight of global institutional investors operating in non-Western economies.
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