IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v65y2017icp399-410.html
   My bibliography  Save this article

Energy intensity and firm growth

Author

Listed:
  • Choi, Bongseok
  • Park, Wooyoung
  • Yu, Bok-Keun

Abstract

Using micro-level data, we attempt to identify the causal relationship between improvement (decline) in energy intensity and firm growth in six countries, namely, France, Germany, Japan, Korea, the U.K., and the U.S., and 21 manufacturing industries during the period 1991 to 2005. We run a panel regression of firm growth using the inverse of a country- and industry-specific relative energy intensity (REI) measure with the corresponding industrial sector in the reference case (the U.S. industry) in addition to the inverse of the traditional energy intensity measure (EI) after controlling several firm, industry, and country variables.

Suggested Citation

  • Choi, Bongseok & Park, Wooyoung & Yu, Bok-Keun, 2017. "Energy intensity and firm growth," Energy Economics, Elsevier, vol. 65(C), pages 399-410.
    • Handle: RePEc:eee:eneeco:v:65:y:2017:i:c:p:399-410
    DOI: 10.1016/j.eneco.2017.05.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988317301792
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2017.05.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    2. Cabral, Luis, 1995. "Sunk Costs, Firm Size and Firm Growth," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 161-172, June.
    3. Bena, Jan & Ondko, Peter, 2012. "Financial development and the allocation of external finance," Journal of Empirical Finance, Elsevier, vol. 19(1), pages 1-25.
    4. Art Durnev & Randall Morck & Bernard Yeung, 2004. "Value-Enhancing Capital Budgeting and Firm-specific Stock Return Variation," Journal of Finance, American Finance Association, vol. 59(1), pages 65-105, February.
    5. Thorsten Beck & Asli Demirguc-Kunt & Luc Laeven & Ross Levine, 2008. "Finance, Firm Size, and Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1379-1405, October.
    6. Duro, Juan Antonio & Alcántara, Vicent & Padilla, Emilio, 2010. "International inequality in energy intensity levels and the role of production composition and energy efficiency: An analysis of OECD countries," Ecological Economics, Elsevier, vol. 69(12), pages 2468-2474, October.
    7. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
    8. Voigt, Sebastian & De Cian, Enrica & Schymura, Michael & Verdolini, Elena, 2014. "Energy intensity developments in 40 major economies: Structural change or technology improvement?," Energy Economics, Elsevier, vol. 41(C), pages 47-62.
    9. Warr, B.S. & Ayres, R.U., 2010. "Evidence of causality between the quantity and quality of energy consumption and economic growth," Energy, Elsevier, vol. 35(4), pages 1688-1693.
    10. Ang, B.W., 2006. "Monitoring changes in economy-wide energy efficiency: From energy-GDP ratio to composite efficiency index," Energy Policy, Elsevier, vol. 34(5), pages 574-582, March.
    11. Liu, Na & Ang, B.W., 2007. "Factors shaping aggregate energy intensity trend for industry: Energy intensity versus product mix," Energy Economics, Elsevier, vol. 29(4), pages 609-635, July.
    12. Gilbert E. Metcalf, 2014. "The Economics of Energy Security," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 155-174, October.
    13. Nilsson, Lars J., 1993. "Energy intensity trends in 31 industrial and developing countries 1950–1988," Energy, Elsevier, vol. 18(4), pages 309-322.
    14. Dale W. Jorgenson, 1986. "The Great Transition: Energy and Economic Change," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-13.
    15. Mulder, Peter & de Groot, Henri L.F., 2012. "Structural change and convergence of energy intensity across OECD countries, 1970–2005," Energy Economics, Elsevier, vol. 34(6), pages 1910-1921.
    16. Sorrell, Steve, 2009. "Jevons' Paradox revisited: The evidence for backfire from improved energy efficiency," Energy Policy, Elsevier, vol. 37(4), pages 1456-1469, April.
    17. Ang, B.W. & Liu, F.L., 2001. "A new energy decomposition method: perfect in decomposition and consistent in aggregation," Energy, Elsevier, vol. 26(6), pages 537-548.
    18. Bart van Ark & Mary O'Mahoney & Marcel P. Timmer, 2008. "The Productivity Gap between Europe and the United States: Trends and Causes," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 25-44, Winter.
    19. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December.
    20. Stijn Claessens & Luc Laeven, 2003. "Financial Development, Property Rights, and Growth," Journal of Finance, American Finance Association, vol. 58(6), pages 2401-2436, December.
    21. Ang, B. W., 2005. "The LMDI approach to decomposition analysis: a practical guide," Energy Policy, Elsevier, vol. 33(7), pages 867-871, May.
    22. Raymond Fisman & Inessa Love, 2007. "Financial Dependence and Growth Revisited," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 470-479, 04-05.
    23. Liddle, Brantley, 2010. "Revisiting world energy intensity convergence for regional differences," Applied Energy, Elsevier, vol. 87(10), pages 3218-3225, October.
    24. Severin Borenstein, 2014. "A Microeconomic Framework for Evaluating Energy Efficiency Rebound and Some Implications," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    25. Sam H. Schurr, 1982. "Energy Efficiency and Productive Efficiency: Some Thoughts Based on American Experience," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 3-14.
    26. Wilson, Bruce & Trieu, Luan Ho & Bowen, Bruce, 1994. "Energy efficiency trends in Australia," Energy Policy, Elsevier, vol. 22(4), pages 287-295, April.
    27. David I. Stern and Astrid Kander, 2012. "The Role of Energy in the Industrial Revolution and Modern Economic Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    28. Parker, Steven & Liddle, Brantley, 2016. "Energy efficiency in the manufacturing sector of the OECD: Analysis of price elasticities," Energy Economics, Elsevier, vol. 58(C), pages 38-45.
    29. Proskuryakova, L. & Kovalev, A., 2015. "Measuring energy efficiency: Is energy intensity a good evidence base?," Applied Energy, Elsevier, vol. 138(C), pages 450-459.
    30. Oda, Junichiro & Akimoto, Keigo & Sano, Fuminori & Tomoda, Toshimasa, 2007. "Diffusion of energy efficient technologies and CO2 emission reductions in iron and steel sector," Energy Economics, Elsevier, vol. 29(4), pages 868-888, July.
    31. Kenneth B. Medlock III & Ronald Soligo, 2001. "Economic Development and End-Use Energy Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 77-105.
    32. Sue Wing, Ian, 2008. "Explaining the declining energy intensity of the U.S. economy," Resource and Energy Economics, Elsevier, vol. 30(1), pages 21-49, January.
    33. Luis R. Murillo-Zamorano, 2005. "The Role of Energy in Productivity Growth: A Controversial Issue?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 69-88.
    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. Xiuqin Zhang & Xudong Shi & Yasir Khan & Taimoor Hassan & Mohamed Marie, 2023. "Carbon Neutrality Challenge: Analyse the Role of Energy Productivity, Renewable Energy, and Collaboration in Climate Mitigation Technology in OECD Economies," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    2. Tzen-Ying Ling & Wei-Kai Hung & Chun-Tsu Lin & Michael Lu, 2020. "Dealing with Green Gentrification and Vertical Green-Related Urban Well-Being: A Contextual-Based Design Framework," Sustainability, MDPI, vol. 12(23), pages 1-24, November.
    3. Acar, Pinar & Berk, Istemi, 2022. "Power infrastructure quality and industrial performance: A panel data analysis on OECD manufacturing sectors," Energy, Elsevier, vol. 239(PC).
    4. Andrius Zuoza & Vaida Pilinkienė, 2021. "Energy Efficiency and Carbon Emission Impact on Competitiveness in the European Energy Intensive Industries," Energies, MDPI, vol. 14(15), pages 1-16, August.
    5. Li, Minghui & Liu, Chong & Shen, Chaohai, 2020. "Does cheap electricity in a target's location add value to the acquirer? Evidence from China," Energy Policy, Elsevier, vol. 145(C).
    6. 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.
    7. Walheer, Barnabé, 2018. "Labour productivity growth and energy in Europe: A production-frontier approach," Energy, Elsevier, vol. 152(C), pages 129-143.
    8. Chen Pei Zhao & Gurgen Gukasyan & Valery Bezpalov & Valeriy Prasolov, 2020. "Development of Modern Standards for Energy Efficiency of Industrial Enterprises within the European Union Policy," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 451-459.
    9. Choi, Bongseok, 2020. "Productivity and misallocation of energy resources: Evidence from Korea’s manufacturing Sector," Resource and Energy Economics, Elsevier, vol. 61(C).
    10. Pan, Xiongfeng & Uddin, Md. Kamal & Saima, Umme & Jiao, Zhiming & Han, Cuicui, 2019. "How do industrialization and trade openness influence energy intensity? Evidence from a path model in case of Bangladesh," Energy Policy, Elsevier, vol. 133(C).
    11. Flavio R. Arroyo M. & Luis J. Miguel, 2019. "The Trends of the Energy Intensity and CO 2 Emissions Related to Final Energy Consumption in Ecuador: Scenarios of National and Worldwide Strategies," Sustainability, MDPI, vol. 12(1), pages 1-21, December.
    12. Livas-García, A. & Bonilla, D. & Escalante Soberanis, M.A. & Bassam, A., 2019. "Projecting the energy pathway using a methodological sequence: The case of Mexico," Energy Policy, Elsevier, vol. 135(C).

    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. Bongseok Choi & Wooyoung Park & Bok-Keun Yu, 2015. "Energy Efficiency and Firm Growth," Working Papers 2015-28, Economic Research Institute, Bank of Korea.
    2. Calcagnini, Giorgio & Giombini, Germana & Travaglini, Giuseppe, 2016. "Modelling energy intensity, pollution per capita and productivity in Italy: A structural VAR approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1482-1492.
    3. Wang, Chunhua, 2013. "Changing energy intensity of economies in the world and its decomposition," Energy Economics, Elsevier, vol. 40(C), pages 637-644.
    4. Karimu, Amin & Brännlund, Runar & Lundgren, Tommy & Söderholm, Patrik, 2017. "Energy intensity and convergence in Swedish industry: A combined econometric and decomposition analysis," Energy Economics, Elsevier, vol. 62(C), pages 347-356.
    5. Zsuzsanna Csereklyei, M. d. Mar Rubio-Varas, and David I. Stern, 2016. "Energy and Economic Growth: The Stylized Facts," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    6. Jimenez, Raul & Mercado, Jorge, 2014. "Energy intensity: A decomposition and counterfactual exercise for Latin American countries," Energy Economics, Elsevier, vol. 42(C), pages 161-171.
    7. Parker, Steven & Liddle, Brantley, 2016. "Energy efficiency in the manufacturing sector of the OECD: Analysis of price elasticities," Energy Economics, Elsevier, vol. 58(C), pages 38-45.
    8. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    9. Ajayi, V. & Reiner, D., 2018. "European Industrial Energy Intensity: The Role of Innovation 1995-2009," Cambridge Working Papers in Economics 1835, Faculty of Economics, University of Cambridge.
    10. Wang, H. & Ang, B.W. & Su, Bin, 2017. "Assessing drivers of economy-wide energy use and emissions: IDA versus SDA," Energy Policy, Elsevier, vol. 107(C), pages 585-599.
    11. Kim, Young Se, 2015. "Electricity consumption and economic development: Are countries converging to a common trend?," Energy Economics, Elsevier, vol. 49(C), pages 192-202.
    12. Mulder, Peter & de Groot, Henri L.F., 2012. "Structural change and convergence of energy intensity across OECD countries, 1970–2005," Energy Economics, Elsevier, vol. 34(6), pages 1910-1921.
    13. Wan, Jun & Baylis, Kathy & Mulder, Peter, 2015. "Trade-facilitated technology spillovers in energy productivity convergence processes across EU countries," Energy Economics, Elsevier, vol. 48(C), pages 253-264.
    14. Choi, Bongseok, 2020. "Productivity and misallocation of energy resources: Evidence from Korea’s manufacturing Sector," Resource and Energy Economics, Elsevier, vol. 61(C).
    15. Liu, Yang & Zhong, Sheng, 2021. "Cross-Economy Dynamics in Energy Productivity: Evidence from 47 Economies over the Period 2000–2015," ADBI Working Papers 1215, Asian Development Bank Institute.
    16. Mulder, Peter & de Groot, Henri L.F. & Pfeiffer, Birte, 2014. "Dynamics and determinants of energy intensity in the service sector: A cross-country analysis, 1980–2005," Ecological Economics, Elsevier, vol. 100(C), pages 1-15.
    17. Barbiero, Francesca & Popov, Alexander & Wolski, Marcin, 2020. "Debt overhang, global growth opportunities, and investment," Journal of Banking & Finance, Elsevier, vol. 120(C).
    18. Thorsten Beck & Asli Demirguc‐Kunt & Luc Laeven & Ross Levine, 2008. "Finance, Firm Size, and Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1379-1405, October.
    19. Chontanawat, Jaruwan & Wiboonchutikula, Paitoon & Buddhivanich, Atinat, 2014. "Decomposition analysis of the change of energy intensity of manufacturing industries in Thailand," Energy, Elsevier, vol. 77(C), pages 171-182.
    20. Huang, Rocco R., 2008. "Tolerance for uncertainty and the growth of informationally opaque industries," Journal of Development Economics, Elsevier, vol. 87(2), pages 333-353, October.

    More about this item

    Keywords

    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

    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:eee:eneeco:v:65:y:2017:i:c:p:399-410. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    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.