Energy efficiency and firm growth

Using micro-level data, we attempt to identify the causal relationship between energy efficiency and firm growth in 6 countries (France, Germany, Japan, Korea, the U.K., and the U.S.) and 22 manufacturing industries during the period of 1990-2005. We run a panel regression of firm growth in a country- and industry-specific relative energy efficiency (REE) to the corresponding industrial sector in the benchmark country (the U.S.) in addition to the traditional energy efficiency measure (EE) using simply the inverse of energy intensity, after controlling several firm, industry, and country variables. We find that REE and EE might have a somewhat different impact on firm growth in terms of profits, although improvements in both REE and EE have a positive effect on the growth rate of sales and capital accumulation. (The rest omitted)