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Does Reduction of Material and Energy Consumption Affect to Innovation Efficiency? The Case of Manufacturing Industry in South Korea

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  • Jaeho Shin

    (College of Business Administration, Seoul National University, Seoul 08826, Korea
    These authors contributed equally to this work.)

  • Changhee Kim

    (College of Business Administration, Incheon National University, Incheon 22012, Korea
    These authors contributed equally to this work.)

  • Hongsuk Yang

    (College of Business Administration, Seoul National University, Seoul 08826, Korea)

Abstract

“Reduction of material and energy consumption” (RMEC) exists as a major objective of innovation and it is proved to affect positively to innovation performance from previous literature. Though innovation should be measured in efficiency rather than performance itself, however, the relationship between material and energy reduction on innovation efficiency is still unanswered. In this paper, we analyzed the effect of RMEC on innovation efficiency considering both innovation inputs and outputs. We utilized data of 388 manufacturing enterprises in Korea, and performed data envelopment analysis (DEA) and tobit regression analysis. According to the result, firms show difference by industry type in terms of innovation efficiency and RMEC. Moreover, the effect of RMEC on innovation efficiency turned out to be negative. The result indicates a possibility that input used for innovation might overweigh the output yielded when firms pursue innovation for the RMEC.

Suggested Citation

  • Jaeho Shin & Changhee Kim & Hongsuk Yang, 2019. "Does Reduction of Material and Energy Consumption Affect to Innovation Efficiency? The Case of Manufacturing Industry in South Korea," Energies, MDPI, vol. 12(6), pages 1-14, March.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:6:p:1178-:d:217358
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