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Anatomy of a paradox: Management practices, organizational structure and energy efficiency

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  • Martin, Ralf
  • Muûls, Mirabelle
  • de Preux, Laure B.
  • Wagner, Ulrich J.

Abstract

This paper provides new evidence on the relationship between management practices and firm performance. We interviewed managers of 190 randomly selected manufacturing plants in the UK and matched their responses with official business microdata. We find that climate friendly management practices are associated with lower energy intensity and higher productivity. Firms that adopt more such practices also conduct more climate friendly R&D which will sustain future growth in energy efficiency. Our findings are akin to the “energy efficiency paradox” and highlight the linkages between particular management practices and firm-level energy efficiency. We also find a strong empirical link between climate friendly management practices and organizational structure. Firms are more likely to adopt such practices if climate change issues are managed by the environmental or energy manager, and if this manager is close to the CEO. Adoption is less likely when the CEO is in charge of climate change issues.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 63 (2012)
Issue (Month): 2 ()
Pages: 208-223

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Handle: RePEc:eee:jeeman:v:63:y:2012:i:2:p:208-223

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Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: Climate policy; Energy efficiency; Firm behavior; Management practices; Manufacturing; Microdata; Organizational structure;

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References

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  1. Ronald J. Shadbegian and Wayne B. Gray, 2005. "Assessing Multi-Dimensional Performance: Environmental and Economic Outcomes," NCEE Working Paper Series, National Center for Environmental Economics, U.S. Environmental Protection Agency 200505, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jun 2005.
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Citations

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Cited by:
  1. Sam Fankhauser & Alex Bowen & Raphael Calel & Antoine Dechezleprêtre & David Grover & James Rydge & Misato Sato, 2012. "Who will win the green race? In search of environmental competitiveness and innovation," Grantham Research Institute on Climate Change and the Environment Working Papers, Grantham Research Institute on Climate Change and the Environment 94, Grantham Research Institute on Climate Change and the Environment.
  2. Hottenrott, Hanna & Rexhäuser, Sascha & Veugelers, Reinhilde, 2012. "Green innovations and organisational change: making better use of environmental technology," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9055, C.E.P.R. Discussion Papers.
  3. Bagayev, Igor & Najman, Boris, 2014. "Money to fill the gap? Local financial development and energy intensity in Europe and Central Asia," MPRA Paper 55193, University Library of Munich, Germany.
  4. Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner & Laure B. de Preux, 2012. "Industry Compensation Under Relocation Risk: A Firm-Level Analysis of the EU Emissions Trading Scheme," CEP Discussion Papers, Centre for Economic Performance, LSE dp1150, Centre for Economic Performance, LSE.
  5. Bagayev, Igor & Najman, Boris, 2013. "Less quality more costs: Does local power sector reliability matter for electricity intensity?," MPRA Paper 46943, University Library of Munich, Germany.
  6. Simone Borghesi & Giulio Cainelli & Massimiliano Mazzanti, 2012. "Brown Sunsets and Green Dawns in the Industrial Sector: Environmental Innovations, Firm Behavior and the European Emission Trading," Working Papers, Fondazione Eni Enrico Mattei 2012.03, Fondazione Eni Enrico Mattei.
  7. Barry Anderson & Jorg Leib & Ralf Martin & Marty McGuigan & Mirabelle Muûls & Ulrich J. Wagner & Laure B. de Preux, 2011. "Climate Change Policy and Business in Europe. Evidence from Interviewing Managers," CEP Occasional Papers, Centre for Economic Performance, LSE 027, Centre for Economic Performance, LSE.
  8. Sascha Rexhäuser & Christian Rammer, 2014. "Environmental Innovations and Firm Profitability: Unmasking the Porter Hypothesis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 57(1), pages 145-167, January.
  9. 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, Elsevier, vol. 61(C), pages 430-440.

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