Energy efficiency gains from trade in intermediate inputs: Firm-level evidence from Indonesia

Michele Imbruno and Tobias D Ketterer

No 2016-06, Discussion Papers from University of Nottingham, GEP

Abstract: This paper investigates whether importing intermediate goods improves firm-level environmental performance in a developing country, using data from the Indonesian manufacturing sector. We build a simple theoretical model showing that trade integration of input markets entails energy efficiency improvements within importers relative to nonimporters. To empirically isolate the impact of firm participation in foreign intermediate input markets we use ‘nearest neighbour’ propensity score matching and difference-indifference techniques. Covering the period 1991-2005, we find evidence that becoming an importer of foreign intermediates boosts energy efficiency, implying beneficial effects for the environment.

Keywords: Trade; Intermediate Inputs; Energy Efficiency; Environment; Indonesia. (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env, nep-int and nep-sea
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Working Paper: Energy efficiency gains from trade in intermediate inputs: firm-level evidence from Indonesia (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:16/06

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