The Energy-Management Nexus in Firms : Which Practices Matter, How Much and for Whom ?

Management practices matter for firm performance. As energy is one input in firm production, management practices may interact with energy use. Using a comprehensive firm-level database covering 31 countries, this study documents the link between structured management practices, energy use, and firm performance. The paper reports several findings. First, although management is negatively correlated with energy expenditure, it bears a positive (or 0) relationship with physical energy use, suggesting that management effort is directed toward saving costs but not reducing environmental impact. These results are primarily driven by the manufacturing sector. Second, among the structured management practices examined, those relating to target-setting are associated with reduced energy expenditure intensity. Third, generic management practices are correlated with greater discipline around energy management. Finally, while generic practices are correlated with stronger firm performance in manufacturing and services, energy-centric practices show a positive association only in services. Vast heterogeneity in adoption and outcomes suggests that targeted approaches to encourage energy management practices in firms may be more effective than uniform ones.