Energy Efficiency and Firm Growth

Bongseok Choi, Wooyoung Park () and Bok-Keun Yu ()
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Wooyoung Park: Korea Energy Economics Institute
Bok-Keun Yu: Advanced Economics Team, Research Department, The Bank of Korea

No 2015-28, Working Papers from Economic Research Institute, Bank of Korea

Abstract: Using micro-level data, we attempt to identify the causal relationship between energy efficiency and firm growth in 6 countries (France, Germany, Japan, Korea, the U.K., and the U.S.) and 22 manufacturing industries during the period of 1990-2005. We run a panel regression of firm growth in a country- and industry-specific relative energy efficiency (REE) to the corresponding industrial sector in the benchmark country (the U.S.) in addition to the traditional energy efficiency measure (EE) using simply the inverse of energy intensity, after controlling several firm, industry, and country variables. We find that REE and EE might have a somewhat different impact on firm growth in terms of profits, although improvements in both REE and EE have a positive effect on the growth rate of sales and capital accumulation. This result indicates that REE as well as EE need to be considered when analyzing the linkages running between energy efficiency and firm growth. Compared to the six country case, we find that the efficient use of energy inputs in Korea has made a smaller contribution to firm growth.

Keywords: Energy efficiency; Energy intensity; Economic growth; Firm growth (search for similar items in EconPapers)
JEL-codes: D24 O13 Q43 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015-11-18
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http://papers.bok.or.kr/RePEc_attach/wpaper/english/wp-2015-28.pdf Working Paper, 2015 (application/pdf)

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