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Electrification and productivity growth in Korean manufacturing plants

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  • Jung, Yonghun
  • Lee, Seong-Hoon

Abstract

This paper presents a theoretical model of firm-specific productivity growth that incorporates technological knowledge by electrification and tests the model empirically. Our theoretical explanations suggest that the energy-transformation from fossil fuel to electricity by electrification could cause a decrease in the short-term level of productivity but an increase in the long-term rate of productivity growth in firms. Our empirical evidence from a large panel of Korean manufacturing plants is generally consistent with the theoretical predictions on the relatedness of technological knowledge by the electrification to the level and rate effects of the firm's productivity. The electrification measured by the share of electricity results in lowering the short-term productivity level but in raising the long-term rate of productivity growth of firms.

Suggested Citation

  • Jung, Yonghun & Lee, Seong-Hoon, 2014. "Electrification and productivity growth in Korean manufacturing plants," Energy Economics, Elsevier, vol. 45(C), pages 333-339.
    • Handle: RePEc:eee:eneeco:v:45:y:2014:i:c:p:333-339
    DOI: 10.1016/j.eneco.2014.07.022
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    Cited by:

    1. Lisa CHAUVET & Alvaro DE MIGUEL TORRES & Alexa TIEMANN, 2018. "Electricity and manufacturing firm profits in Myanmar," Working Papers P214, FERDI.
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    3. Lin, Boqiang & Zhu, Junpeng, 2020. "Chinese electricity demand and electricity consumption efficiency: Do the structural changes matter?," Applied Energy, Elsevier, vol. 262(C).
    4. Ghosh, Ranjan & Kathuria, Vinish, 2016. "The effect of regulatory governance on efficiency of thermal power generation in India: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 89(C), pages 11-24.

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    More about this item

    Keywords

    Electrification; Economic growth; Korean manufacturing plants;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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