62
core product for solar power generation. Solar module manufacturing has rapidly grown
and globalized in recent years; currently, the top 15 solar module
manufacturers account
for 59% of the global market share.
98
The selection of global top manufacturers is natural
given the significant influence of these firms on the global solar market. The content
analysis of the annual reports of the firms enabled to explore and explain the changes of
the global solar market and multinational corporations’ reactions to the changes.
Data
Annual reports have been used by many scholars for content analysis due to their
vast amount of information.
99
The reports include both quantitative and qualitative data
such as a CEO’s statement,
financial status, strategies, market risks, and governance. As
annual reports are one of the most important corporate tools for communicating with their
environments, substantial efforts of top-level management are involved.
100
In this sense,
although an annual report is written by public relations department, it can be said that it
represents the position of a corporation.
98
IHS, “Leading Solar Module Suppliers Extend Dominance in 2013; Chinese Still on
Top,”
http://press.ihs.com/press-release/design-supply-chain-media/leading-solar-
module-suppliers-extend-dominance-2013-chinese
(April 30, 2014).
99
Brennan, Niamh. "Reporting intellectual capital in annual reports:
evidence from
Ireland."
Accounting, Auditing & Accountability Journal
14, no. 4 (2001): 423-436.;
Lajili, Kaouthar, and Daniel Zéghal. "A content analysis of risk management disclosures
in Canadian annual reports
." Canadian Journal of Administrative Sciences/Revue
Canadienne des Sciences de l'Administration
22, no. 2 (2005): 125-142.; Mio, Chiara,
and Andrea Venturelli. "Non-financial Information About Sustainable Development and
Environmental Policy in the Annual Reports of Listed Companies: Evidence from Italy
and the UK."
Corporate Social Responsibility and Environmental Management
20, no. 6
(2013): 340-358.; Niskala, Mikael, and Michael Pretes. "Environmental reporting in
Finland: A note on the use of annual reports."
Accounting, Organizations and Society
20,
no. 6 (1995): 457-466.
100
Bowman, Edward H. "Content analysis of annual reports for corporate strategy and
risk."
Interfaces
14, no. 1 (1984): 61-71.
63
Unlike surveys or qualitative interviews, annual reports are not designed for
research. Therefore, there are risks that necessary data for
this research may not be
included in annual reports. However, most annual reports address the risks and the
business of their organizations, since those are one of main interests of the readers of
annual reports, their shareholders. Moreover, as detailed description of risks and their
business are required for publicly traded companies in the United States,
the annual
reports of those companies include decent quality data. The U.S. Securities and Exchange
Commission requires publicly traded companies to submit annual reports, which include
very detailed information on financial status. Domestic public firms use form 10-K, and
foreign private issuers use form 20-F.
101
These forms include a detailed description of
risks, an overview of the firm’s business, audited financial statements,
and details of
governance.
The time frame of the study is the recent ten years from 2005-2014.
102
The solar
PV market has experienced many changes during this period. Since 2005, solar module
capacity has rapidly increased until 2011. The oversupply of products became a serious
issue in the global solar PV market since 2011. Figure 10 shows the degree of oversupply
of solar PV module has started increasing in 2006, and sharply increased in 2011. In
2012, the module production capacity is about twice of installed PV capacity. This
oversupply caused a sharp drop of module prices, which made many solar PV
corporations go out of business or file for bankruptcy. Under these circumstances, the
101
Although foreign companies publish annual reports under the U.S. rules,
they write
the reports as a whole company rather than as a subsidiary in the U.S. Therefore, the
annual reports written by using form 20-F can be used as data for this study.
102
The U.S. Securities and Exchange Commission amended the rule on 20-F on
December 7, 2007. As this amendment was related to financial statements, this
amendment does not affect the validity of the data.
64
solar module price has rapidly decreased since 2008. This significant change of the global
solar market shows that the analysis of the recent ten years enables to understand the
change of the external environment and the reactions of the actors in the market.
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