Is energy intensity important for the productivity growth of EET adopters?

Energy Efficient Technologies (EET) have attracted strong interest because of their role in reducing environmental damage. Their adoption, however, remains rather low, while their impact on productivity is substantial and differentiating with respect to technological characteristics. Energy intensity, being such an obvious characteristic, could be employed to classify EET adopters thus giving rise to two heterogeneous technologies (i.e. those corresponding to firms of low and high energy consumption). Hence, this paper examines the impact of energy intensity on the productivity growth of firms adopting EET in varying time intervals through a metafrontier-based framework, while also decomposing that impact in terms of technical, efficiency and scale-efficiency changes. The analysis is complemented by examining the role of firm-specific characteristics on the productivity growth through linear regression.

► We explore the role of Energy Intensity on the TFP growth of EET adopters. ► A metafrontier based Malmquist Productivity index is introduced. ► Time and additional heterogeneity are handled through a second-stage analysis. ► Energy intensity does not affect significantly the TFP growth of EET adopters. ► EET adopters' underlying knowledge conditions is the main driver for their growth.