Interfirm knowledge sharing for energy efficiency

Climate change as a global challenge requires collective responses from stakeholders in society. As the main source of energy consumption generating greenhouse gases (e.g., CO2), firms increasingly share their problems and experiences regarding energy saving in interfirm knowledge communities. By distinguishing knowledge sharing from free‐riding, we investigate how firms that participate in an interfirm knowledge community for energy saving improve their energy efficiency. We use a unique panel dataset collected between 2001 and 2011 from the Energy Saving through Partnership program in South Korea. Our findings show that, within the community for energy saving, firms that share their knowledge through presenting their best practices improve energy efficiency to a greater extent (approximately 11.8–14.8%) than free‐riders. Our results suggest that the improvement in knowledge‐sharing firms’ energy efficiency is attributed to relevant and tailored feedback gained from other participants. Further, we find that the understanding and activeness of other participants, which determine the quality and quantity of feedback respectively, significantly affect knowledge‐sharing firms’ energy efficiency. Overall, our analysis has implications for firms on how they can contribute to a collective response to climate change through their collaborative activities in an interfirm knowledge community.