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Energy Efficiency and Productivity: A Worldwide Firm-level Analysis

This work aims to explore the relationship between energy efficiency and productivity using firm-level data. Although important to policymaking, very few academic studies analyze this relationship at the firm level. Taking advantage of the national representative World Bank Enterprise Survey (WBES) data, we contribute to the current literature by providing one of the most comprehensive firm-level analyses to date in terms of geographical coverage. To this end, we apply a standard constant return to scale Cobb-Douglas production function expanded to energy efficiency. Our findings show a positive relationship between alternative measures of energy efficiency and firm-level productivity. This relationship holds, albeit with different magnitudes, for all industries and regional groups. This work provides further empirical support for the messages conveyed by international institutions regarding the positive relationship between environmental actions and firm performance, thus supporting collective efforts to improve the private sector's energy efficiency, including the implementation of Agenda 2030.

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Keywords: Energy efficiency, Firm productivity, Agenda 2030, Regression analysis, Worldwide analysis

DOI: 10.5547/01956574.43.5.pmon

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Published in Volume 43, Number 5 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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