Firms’ Resilience to Energy Shocks and Response to Fiscal Incentives: Assessing the Impact of 2022 Energy Crisis

David Amaglobeli, Joaquim Guilhoto, Samir Jahan, Salma Khalid, Waikei Lam, Gregory Legoff, Brent Meyer, Xuguang Simon Sheng, Pawel Smietanka, Sonya Waddell and Daniel Weitz

No 2024/027, IMF Working Papers from International Monetary Fund

Abstract: The energy price shock in 2022 led to government support for firms in some countries, sparking debate about the rationale and the nature of such support. The results from nationally representative firm surveys in the United States and Germany indicate that firms in these countries were generally resilient. Coping strategies adopted by firms included the pass-through of higher costs to consumers, adjustment of profit margins (United States) and investments in energy saving and efficiency (Germany). Firms in energy-intensive industries would have been significantly more affected if international energy prices were fully passed through to domestic prices in Europe. Survey responses further reveal that most firms are uncertain about the impact of recent policy announcments on green subsidies. Firms take advantage of fiscal incentives to accelerate their climate-related investment plans are often those that have previous plans to do so. These findings suggest better targeting and enhancing policy certainty will be important when facilitate the green transition among firms.

Keywords: Energy prices; Subsidies; Survey; Cost-Push Model; Input Output Table; Firm Behavior; energy price shock; D. government intervention; firms' resilience; investment plan; Energy conservation; Inflation; Greenhouse gas emissions; Climate policy; Global; Europe (search for similar items in EconPapers)
Pages: 23
Date: 2024-02-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-eur
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