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Energy Use Patterns and Firm Performance: Evidence from Indian Industries

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  • Santosh Kumar Sahu

    (Madras School of Economics)

Abstract

This paper is an attempt to understand the relationship between firm performances based on energy use patterns of Indian manufacturing industries. Determinates of firm performances are estimated for the full sample and for the sample of firms using similar energy sources. Econometric analysis of the data collected from the CMIE PROWESS at firm level from 2005-2013 reveals that the determinants of profitability vary across groups. Energy intensity is positively related to profitability for three models except for the firms using natural gas as primary source of energy. R and D intensity is positively related to profitability for the full sample and for the firms using petroleum. For the firms using coal as primary source of energy, less R and D intensive firms are found to be profitable. For all the cases, firm size is found to be nonlinearly related to profitability. In the policy front, shifting primary energy source from coal and petroleum to natural gas; firms can become energy efficient and profitable.

Suggested Citation

  • Santosh Kumar Sahu, 2014. "Energy Use Patterns and Firm Performance: Evidence from Indian Industries," Working Papers 2014-092, Madras School of Economics,Chennai,India.
    • Handle: RePEc:mad:wpaper:2014-092
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    References listed on IDEAS

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    Cited by:

    1. Helan Alias Vaibhavi Kabirdas Alavani & Richa Shukla & Debasis Patnaik, 2024. "An Assessment of the Relationship between Profitability and Energy Intensity for Technology Oriented Manufacturing Firms in India," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 538-549, July.
    2. Santosh K. Sahu & Deepanjali Mehta, 2018. "Determinants Of Energy And Co2 Emission Intensities: A Study Of Manufacturing Firms In India," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(02), pages 389-407, March.
    3. Liliana Nicoleta Simionescu & Ștefan Cristian Gherghina & Ziad Sheikha & Hiba Tawil, 2020. "Does Water, Waste, and Energy Consumption Influence Firm Performance? Panel Data Evidence from S&P 500 Information Technology Sector," IJERPH, MDPI, vol. 17(14), pages 1-31, July.
    4. Xin Yan & Jianping Ge, 2017. "The Economy-Carbon Nexus in China: A Multi-Regional Input-Output Analysis of the Influence of Sectoral and Regional Development," Energies, MDPI, vol. 10(1), pages 1-28, January.
    5. Pham, Huy & Ha, Van & Le, Hanh-Hong & Ramiah, Vikash & Frino, Alex, 2024. "The effects of polluting behaviour, dirty energy and electricity consumption on firm performance: Evidence from the recent crises," Energy Economics, Elsevier, vol. 129(C).

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    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies

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