IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2016-02-21.html
   My bibliography  Save this article

The Effect of Energy Service Companies on Energy Use in Selected Developing Countries: A Synthetic Control Approach

Author

Listed:
  • Pei-Chien Lin

    (Department of Industrial Economics, Tamkang University, Taiwan, Republic of China)

  • Ming-Feng Hung

    (Department of Industrial Economics, Tamkang University, Taiwan, Republic of China)

Abstract

This study investigates the empirical effect of the service provided by the energy service companies (ESCOs) on the total energy use in thirteen developing countries by employing a transparent and data-driven statistical methodology, the synthetic control method (SCM). This methodology compares the post-treatment total energy use of a treated country, a country that has initiated ESCO activities, with the trajectory of total energy use for a synthetic control unit, a combination of economies being similar to the treated country with the exception of no ESCO activities initiated. The SCM can account for the potential heterogeneity regarding the effect of ESCO activities in various countries. In these thirteen countries, we find that the ESCOs exert a strong energy-saving effect in Colombia, Ghana, Kenya and South Africa; while a robust energy-using effect is found in Chile. No significant energy using or saving effects are found in the rest of treated countries

Suggested Citation

  • Pei-Chien Lin & Ming-Feng Hung, 2016. "The Effect of Energy Service Companies on Energy Use in Selected Developing Countries: A Synthetic Control Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 335-348.
  • Handle: RePEc:eco:journ2:2016-02-21
    as

    Download full text from publisher

    File URL: http://www.econjournals.com/index.php/ijeep/article/download/2126/1447
    Download Restriction: no

    File URL: http://www.econjournals.com/index.php/ijeep/article/view/2126/1447
    Download Restriction: no

    References listed on IDEAS

    as
    1. Yu, Yongzhen, 2012. "How to fit demand side management (DSM) into current Chinese electricity system reform?," Energy Economics, Elsevier, vol. 34(2), pages 549-557.
    2. Fang, Wen Shwo & Miller, Stephen M. & Yeh, Chih-Chuan, 2012. "The effect of ESCOs on energy use," Energy Policy, Elsevier, vol. 51(C), pages 558-568.
    3. Rohdin, P. & Thollander, P., 2006. "Barriers to and driving forces for energy efficiency in the non-energy intensive manufacturing industry in Sweden," Energy, Elsevier, vol. 31(12), pages 1836-1844.
    4. Kostka, Genia & Shin, Kyoung, 2013. "Energy conservation through energy service companies: Empirical analysis from China," Energy Policy, Elsevier, vol. 52(C), pages 748-759.
    5. Wang-Sheng Lee, 2011. "Comparative case studies of the effects of inflation targeting in emerging economies," Oxford Economic Papers, Oxford University Press, vol. 63(2), pages 375-397, April.
    6. Okay, Nesrin & Akman, Ugur, 2010. "Analysis of ESCO activities using country indicators," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2760-2771, December.
    7. Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2013. "Catastrophic Natural Disasters and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1549-1561, December.
    8. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    9. Vine, Edward, 2005. "An international survey of the energy service company (ESCO) industry," Energy Policy, Elsevier, vol. 33(5), pages 691-704, March.
    10. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    11. Li, Yan & Qiu, Yueming & Wang, Yi David, 2014. "Explaining the contract terms of energy performance contracting in China: The importance of effective financing," Energy Economics, Elsevier, vol. 45(C), pages 401-411.
    12. Goldman, Charles A. & Hopper, Nicole C. & Osborn, Julie G., 2005. "Review of US ESCO industry market trends: an empirical analysis of project data," Energy Policy, Elsevier, vol. 33(3), pages 387-405, February.
    13. Bertoldi, Paolo & Rezessy, Silvia & Vine, Edward, 2006. "Energy service companies in European countries: Current status and a strategy to foster their development," Energy Policy, Elsevier, vol. 34(14), pages 1818-1832, September.
    14. Schleich, Joachim & Gruber, Edelgard, 2008. "Beyond case studies: Barriers to energy efficiency in commerce and the services sector," Energy Economics, Elsevier, vol. 30(2), pages 449-464, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Energy Service Companies; Synthetic Control Method; Total Energy Use;

    JEL classification:

    • 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
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

    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:eco:journ2:2016-02-21. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilhan Ozturk). General contact details of provider: http://www.econjournals.com .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.