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Selling under other skies when energy prices skyrocket: How do the companies adapt their export strategy when energy prices rise?

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  • Dussaux, Damien
  • Monjon, Stéphanie

Abstract

The prospect of higher carbon taxation raises concerns that these policies could hinder the ability of domestic industry to compete in export markets, especially for energy-intensive sectors. The recent jump in energy prices leads to even greater worries. This paper investigates the impact of a change in energy prices on export patterns of manufacturing firms using a large panel of French firms observed from 2001 to 2015. The identification strategy uses a fixed weight energy price index as a shift-share instrumental variable for the average energy cost. For the average firm we find that a 10% increase in the energy cost is associated with a 3.6% decrease in total export value, a 1.3% decrease in the number of export destinations, and a 2.3% increase in export prices. But there are substantial heterogeneities between firms facing a similar increase in energy costs and the impact of an energy cost increase differs from one destination export to another.

Suggested Citation

  • Dussaux, Damien & Monjon, Stéphanie, 2023. "Selling under other skies when energy prices skyrocket: How do the companies adapt their export strategy when energy prices rise?," Energy Policy, Elsevier, vol. 183(C).
  • Handle: RePEc:eee:enepol:v:183:y:2023:i:c:s0301421523003622
    DOI: 10.1016/j.enpol.2023.113777
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