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Energy Efficiency Gains From Multinational Supply Chains: Evidence From Turkey

Author

Listed:
  • Michele Imbruno

    (Sapienza University of Rome and GEP, Nottingham)

  • Alessia Lo Turco

    (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM))

  • Daniela Maggioni

    (Department of Economics, Catholic University of the Sacred)

Abstract

We inspect whether multinational supply chains bring energy efficiency gains to domestic firms active in a host country. Our theoretical model suggests that the presence of foreign firms in upstream manufacturing and energy industries expands the availability of high-quality inputs for downstream domestic firms, implying a reduction in their energy intensity. We test these theoretical predictions using data from Turkish manufacturing firms over the period 2010-2015. Our empirical analysis shows that domestic-owned firms in sectors that are more likely to buy manufacturing and energy inputs from foreign-owned suppliers tend to reduce their energy intensity, confirming environmental gains from FDI. When exploring the underlying mechanisms, we provide evidence that the presence of foreign firms in upstream sectors leads to an increase in the quality of available inputs which turns into improvements in downstream domestic firms' energy efficiency.

Suggested Citation

  • Michele Imbruno & Alessia Lo Turco & Daniela Maggioni, 2023. "Energy Efficiency Gains From Multinational Supply Chains: Evidence From Turkey," Working Papers 477, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    • Handle: RePEc:anc:wpaper:477
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Energy Efficiency; FDI; MNEs; Turkey;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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