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Energy Efficiency and Firm Growth

Author

Listed:
  • Bongseok Choi

    (Korea Energy Economics Institute)

  • Wooyoung Park

    (Korea Energy Economics Institute)

  • Bok-Keun Yu

    (Advanced Economics Team, Research Department, The 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.

Suggested Citation

  • Bongseok Choi & Wooyoung Park & Bok-Keun Yu, 2015. "Energy Efficiency and Firm Growth," Working Papers 2015-28, Economic Research Institute, Bank of Korea.
    • Handle: RePEc:bok:wpaper:1528
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    References listed on IDEAS

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    More about this item

    Keywords

    Energy efficiency; Energy intensity; Economic growth; Firm growth;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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