Energy and environment efficiency of industry and its productivity effect

It is crucial for the industrial sector to achieve the multifaceted or composite efficiency of energy savings and the minimization of environmental wastes in the present circumstances of worsening global warming and resource depletion. Furthermore, the positive effects of composite energy efficiency on sustainable growth could lead to practical questions for the industrial sector, to ensure that it consistently uses its energy and resources effectively. The present research examines the positive contribution of this composite efficiency to the growth of final outputs in this sector, using the two-stage method of Malmquist efficiency analysis (MEA) and the linear regression of panel data from about 154 Korean industries from 2010 to 2012. The results found that composite efficiency and changes in the production factors have positive impacts on industrial productivity. In particular, relative efficiency has a positive influence on productivity, but technical efficiency does not have a significant impact. Our findings suggest that industries may voluntarily make efforts to improve their use of energy resources, but they also need to invest in energy technologies and develop efficient production structures, with the help of public policies.