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Determinants of enterprises use of energy efficient technologies: Evidence from urban Ethiopia

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

Abstract

In this paper, we examine the determinants of Micro, Small and Medium Enterprises’ adoption of energy efficiency practices and technologies, using cross-sectional data of 8174 randomly selected enterprises from ten major urban areas of Ethiopia. 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 know-how to adopt these technologies. Further, clustered enterprises are also more likely to use energy efficient technologies, revealing spillover effect of being located in the same place or it may reflect entrepreneurs’ predisposition towards efficiency. 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 (clusters) to newly established enterprises may help in increasing adoption of energy efficient technologies. Further, informational (educational) campaigns about the private and public(environmental) benefits of energy efficient technologies are also important.

Suggested Citation

  • Hassen, Sied & Gebrehiwot, Tagel & Arega, Tiruwork, 2018. "Determinants of enterprises use of energy efficient technologies: Evidence from urban Ethiopia," Energy Policy, Elsevier, vol. 119(C), pages 388-395.
    • Handle: RePEc:eee:enepol:v:119:y:2018:i:c:p:388-395
    DOI: 10.1016/j.enpol.2018.04.057
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    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. Sun, Haibo & Han, Fangyuan & Liu, Zhonglu, 2024. "Does executive environmental protection experience reduce enterprise energy consumption intensity?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 652-666.
    3. 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.
    4. 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.
    5. 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.
    6. 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).
    7. Zhang, Yixiang & Zhou, Weiyi & Liu, Meiling, 2022. "Driving factors of enterprise energy-saving and emission reduction behaviors," Energy, Elsevier, vol. 256(C).
    8. 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.
    9. Pal, Kalyani & Mukhopadhyay, Jyoti Prasad & Bhagawan, Praveen, 2024. "Does cap-and-trade scheme impact energy efficiency and firm value? Empirical evidence from India," Energy Economics, Elsevier, vol. 134(C).

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    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

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