IDEAS home Printed from https://ideas.repec.org/p/hhs/gunefd/2018_001.html
   My bibliography  Save this paper

Determinants of Enterprises’ Use of Energy Efficient Technologies: Evidence from Urban Ethiopia

Author

Listed:
  • Hassen, Sied
  • Gebrehiwot, Tagel
  • Arega, Tiruwork

Abstract

We conducted a cross-sectional survey of 8174 micro, small and medium enterprises from ten major urban areas in Ethiopia to study the determinants of the enterprises’ adoption of energy efficiency practices and technologies. For identification, we rely on a generalized ordered probit model. The findings reveal that, as the size of the enterprise becomes larger, it is more likely the enterprise will undertake energy efficient practices and technologies. This may be because larger enterprises are less likely to face constraints related to capital or knowhow to adopt these technologies. Further, enterprises which are clustered in an industrial zone are also more likely to use energy efficient technologies, revealing a spillover effect of being located in the same place. Enterprises with highly educated entrepreneurs are in favor of the adoption of the technologies. By contrast, entrepreneurs who perceive pro-environmental activities as unnecessary and costly are less likely to use energy efficient technologies. Our results imply that expansion of industrial zones and educational (informational) campaigns are important for enhancing micro and small enterprises’ adoption of energy efficient technologies.

Suggested Citation

  • Hassen, Sied & Gebrehiwot, Tagel & Arega, Tiruwork, 2018. "Determinants of Enterprises’ Use of Energy Efficient Technologies: Evidence from Urban Ethiopia," EfD Discussion Paper 18-1, Environment for Development, University of Gothenburg.
    • Handle: RePEc:hhs:gunefd:2018_001
    as

    Download full text from publisher

    File URL: https://www.efdinitiative.org/sites/default/files/publications/efd_dp_18-01.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nagesha, N. & Balachandra, P., 2006. "Barriers to energy efficiency in small industry clusters: Multi-criteria-based prioritization using the analytic hierarchy process," Energy, Elsevier, vol. 31(12), pages 1969-1983.
    2. Cantore, Nicola & Calì, Massimiliano & Velde, Dirk Willem te, 2016. "Does energy efficiency improve technological change and economic growth in developing countries?," Energy Policy, Elsevier, vol. 92(C), pages 279-285.
    3. Stefan Boes & Rainer Winkelmann, 2006. "Ordered response models," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(1), pages 167-181, March.
    4. Mulugetta, Yacob, 2008. "Human capacity and institutional development towards a sustainable energy future in Ethiopia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(5), pages 1435-1450, June.
    5. Cagno, E. & Trucco, P. & Trianni, A. & Sala, G., 2010. "Quick-E-scan: A methodology for the energy scan of SMEs," Energy, Elsevier, vol. 35(5), pages 1916-1926.
    6. Swan, Lukas G. & Ugursal, V. Ismet, 2009. "Modeling of end-use energy consumption in the residential sector: A review of modeling techniques," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 1819-1835, October.
    7. Brew-Hammond, Abeeku, 2010. "Energy access in Africa: Challenges ahead," Energy Policy, Elsevier, vol. 38(5), pages 2291-2301, May.
    8. Karekezi, Stephen & Kithyoma, Waeni, 2002. "Renewable energy strategies for rural Africa: is a PV-led renewable energy strategy the right approach for providing modern energy to the rural poor of sub-Saharan Africa?," Energy Policy, Elsevier, vol. 30(11-12), pages 1071-1086, September.
    9. Trianni, A. & Cagno, E., 2012. "Dealing with barriers to energy efficiency and SMEs: Some empirical evidences," Energy, Elsevier, vol. 37(1), pages 494-504.
    10. Trianni, Andrea & Cagno, Enrico & Worrell, Ernst, 2013. "Innovation and adoption of energy efficient technologies: An exploratory analysis of Italian primary metal manufacturing SMEs," Energy Policy, Elsevier, vol. 61(C), pages 430-440.
    11. Anderson, Soren T. & Newell, Richard G., 2004. "Information programs for technology adoption: the case of energy-efficiency audits," Resource and Energy Economics, Elsevier, vol. 26(1), pages 27-50, March.
    12. Li, Ke & Lin, Boqiang, 2016. "Impact of energy conservation policies on the green productivity in China’s manufacturing sector: Evidence from a three-stage DEA model," Applied Energy, Elsevier, vol. 168(C), pages 351-363.
    13. Bazilian, Morgan & Rogner, Holger & Howells, Mark & Hermann, Sebastian & Arent, Douglas & Gielen, Dolf & Steduto, Pasquale & Mueller, Alexander & Komor, Paul & Tol, Richard S.J. & Yumkella, Kandeh K., 2011. "Considering the energy, water and food nexus: Towards an integrated modelling approach," Energy Policy, Elsevier, vol. 39(12), pages 7896-7906.
    14. Cagno, Enrico & Trianni, Andrea, 2013. "Exploring drivers for energy efficiency within small- and medium-sized enterprises: First evidences from Italian manufacturing enterprises," Applied Energy, Elsevier, vol. 104(C), pages 276-285.
    15. Fleiter, Tobias & Schleich, Joachim & Ravivanpong, Ployplearn, 2012. "Adoption of energy-efficiency measures in SMEs—An empirical analysis based on energy audit data from Germany," Energy Policy, Elsevier, vol. 51(C), pages 863-875.
    16. Karekezi, Stephen, 2002. "Renewables in Africa--meeting the energy needs of the poor," Energy Policy, Elsevier, vol. 30(11-12), pages 1059-1069, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stephen K. Dimnwobi & Ebele S. Nwokoye & Clement I. Igbanugo & Chukwunonso Ekesiobi & Simplice A. Asongu, 2022. "Assessment of Energy Efficiency Investment in Onitsha Business Cluster, Nigeria," Working Papers of the African Governance and Development Institute. 22/095, African Governance and Development Institute..
    2. Zhao, Nan & Liu, Xiaojie & Zhang, Zizhe, 2022. "Does competition from the informal sector affect firms’ energy intensity? Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 130-142.
    3. Piotr Żuk & Paweł Żuk, 2021. "Increasing Energy Prices as a Stimulus for Entrepreneurship in Renewable Energies: Ownership Structure, Company Size and Energy Policy in Companies in Poland," Energies, MDPI, vol. 14(18), pages 1-19, September.
    4. Tingting Xiao & Zhong Liu, 2023. "Air Pollution and Enterprise Energy Efficiency: Evidence from Energy-Intensive Manufacturing Industries in China," Sustainability, MDPI, vol. 15(7), pages 1-17, April.
    5. Wang, Jian & Sun, Furong & Lv, Kangjuan & Wang, Lisha, 2022. "Industrial agglomeration and firm energy intensity: How important is spatial proximity?," Energy Economics, Elsevier, vol. 112(C).
    6. Zhang, Yixiang & Zhou, Weiyi & Liu, Meiling, 2022. "Driving factors of enterprise energy-saving and emission reduction behaviors," Energy, Elsevier, vol. 256(C).
    7. Piotr Żuk & Paweł Żuk, 2021. "On the Socio-Cultural Determinants of Polish Entrepreneurs’ Attitudes towards the Development of Renewable Energy: Business, Climate Skepticism Ideology and Climate Change," Energies, MDPI, vol. 14(12), pages 1-16, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Trianni, Andrea & Cagno, Enrico & Farné, Stefano, 2016. "Barriers, drivers and decision-making process for industrial energy efficiency: A broad study among manufacturing small and medium-sized enterprises," Applied Energy, Elsevier, vol. 162(C), pages 1537-1551.
    2. Apriani Soepardi & Pratikto Pratikto & Purnomo Budi Santoso & Ishardita Pambudi Tama & Patrik Thollander, 2018. "Linking of Barriers to Energy Efficiency Improvement in Indonesia’s Steel Industry," Energies, MDPI, vol. 11(1), pages 1-22, January.
    3. Herrera, Bernardo & Amell, Andrés & Chejne, Farid & Cacua, Karen & Manrique, Raiza & Henao, Wilson & Vallejo, Gabriel, 2017. "Use of thermal energy and analysis of barriers to the implementation of thermal efficiency measures in cement production: Exploratory study in Colombia," Energy, Elsevier, vol. 140(P1), pages 1047-1058.
    4. Schlomann, Barbara & Schleich, Joachim, 2015. "Adoption of low-cost energy efficiency measures in the tertiary sector—An empirical analysis based on energy survey data," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 1127-1133.
    5. Thollander, Patrik & Backlund, Sandra & Trianni, Andrea & Cagno, Enrico, 2013. "Beyond barriers – A case study on driving forces for improved energy efficiency in the foundry industries in Finland, France, Germany, Italy, Poland, Spain, and Sweden," Applied Energy, Elsevier, vol. 111(C), pages 636-643.
    6. Shi, Yingying & Zeng, Yongchao & Engo, Jean & Han, Botang & Li, Yang & Muehleisen, Ralph T., 2020. "Leveraging inter-firm influence in the diffusion of energy efficiency technologies: An agent-based model," Applied Energy, Elsevier, vol. 263(C).
    7. Nguyen, Jason, 2024. "Beyond policy impacts: Internal strategic capabilities as determinants of industrial energy efficiency implementation," Energy Policy, Elsevier, vol. 184(C).
    8. Fleiter, Tobias & Schleich, Joachim & Ravivanpong, Ployplearn, 2012. "Adoption of energy-efficiency measures in SMEs—An empirical analysis based on energy audit data from Germany," Energy Policy, Elsevier, vol. 51(C), pages 863-875.
    9. Solnørdal, Mette Talseth & Thyholdt, Sverre Braathen, 2019. "Absorptive capacity and energy efficiency in manufacturing firms – An empirical analysis in Norway," Energy Policy, Elsevier, vol. 132(C), pages 978-990.
    10. Mette Talseth Solnørdal & Lene Foss, 2018. "Closing the Energy Efficiency Gap—A Systematic Review of Empirical Articles on Drivers to Energy Efficiency in Manufacturing Firms," Energies, MDPI, vol. 11(3), pages 1-30, February.
    11. Paramonova, Svetlana & Thollander, Patrik, 2016. "Energy-efficiency networks for SMEs: Learning from the Swedish experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 295-307.
    12. Costa-Campi, María Teresa & García-Quevedo, José & Segarra, Agustí, 2015. "Energy efficiency determinants: An empirical analysis of Spanish innovative firms," Energy Policy, Elsevier, vol. 83(C), pages 229-239.
    13. Ida Johansson & Nawzad Mardan & Erwin Cornelis & Osamu Kimura & Patrik Thollander, 2019. "Designing Policies and Programmes for Improved Energy Efficiency in Industrial SMEs," Energies, MDPI, vol. 12(7), pages 1-17, April.
    14. Apriani Soepardi & Patrik Thollander, 2018. "Analysis of Relationships among Organizational Barriers to Energy Efficiency Improvement: A Case Study in Indonesia’s Steel Industry," Sustainability, MDPI, vol. 10(1), pages 1-13, January.
    15. Olsthoorn, Mark & Schleich, Joachim & Hirzel, Simon, 2017. "Adoption of Energy Efficiency Measures for Non-residential Buildings: Technological and Organizational Heterogeneity in the Trade, Commerce and Services Sector," Ecological Economics, Elsevier, vol. 136(C), pages 240-254.
    16. Kalantzis, Fotios & Revoltella, Debora, 2019. "How energy audits promote SMEs' energy efficiency investment," EIB Working Papers 2019/02, European Investment Bank (EIB).
    17. Monjurul Hasan, A S M & Trianni, Andrea & Shukla, Nagesh & Katic, Mile, 2022. "A novel characterization based framework to incorporate industrial energy management services," Applied Energy, Elsevier, vol. 313(C).
    18. Marlene Preiß, 2021. "Treiber und Hemmnisse betrieblicher Effizienzmaßnahmen – Vernetzung als Erfolgsfaktor [Drivers and barriers of operational efficiency measures—networking as a success factor]," Sustainability Nexus Forum, Springer, vol. 29(2), pages 93-106, June.
    19. Trianni, Andrea & Cagno, Enrico & Worrell, Ernst, 2013. "Innovation and adoption of energy efficient technologies: An exploratory analysis of Italian primary metal manufacturing SMEs," Energy Policy, Elsevier, vol. 61(C), pages 430-440.
    20. Cagno, E. & Worrell, E. & Trianni, A. & Pugliese, G., 2013. "A novel approach for barriers to industrial energy efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 290-308.

    More about this item

    Keywords

    energy efficiency; enterprise; enterprise size; generalized ordered probit;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:gunefd:2018_001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Franklin Amuakwa-Mensah (email available below). General contact details of provider: https://www.efdinitiative.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.