Home (not so) sweet home: Domestic political uncertainty driving early internationalisation in the Spanish renewable energy context

Abstract

Purpose: This paper aims to elaborate on the crucial effects that a seemingly detrimental policy change in Spain has had on the international entrepreneurial activities of domestic renewable energy (RE) firms. Design/methodology/approach: Primary data were collected from nine RE companies in Spain and then triangulated with secondary data and interviews from informants in other local institutions. Findings: Domestic RE firms, due to an institutional scape driver action, reacted to an increasingly uncertain and generally more adverse renewable energy policy framework in this country by preferring to internationalise towards foreign markets that had lower political uncertainty than the domestic one. Research limitations/implications: This paper complements previous research primarily on firm-specific factors that enhance internationalising firms’ survival and growth through a focus on the impact of a changing institutional-political environment at the home country-level. Practical implications: Practitioners in the RE sector should analyse the risk of focusing only on the home market, as it can be too dependent on uncontrolled variations in domestic energy policy. Social implications: The findings indicate that a more stable and supportive, long-term perspective in the domestic RE policy is essential for the sustained growth and development of this emerging industry. Originality/value: To analyse the strategy by which a number of purposefully selected companies were able to use international expansion as a survival-seeking strategy against a drastic policy-level change in the domestic RE market.