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

Michele Imbruno and Tobias Ketterer ()
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Michele Imbruno: CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique

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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 non-importers. To empirically isolate the impact of firm participation in foreign intermediate input markets we use ‘nearest neighbour' propensity score matching and difference-in-difference 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: 2018-11
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Citations: View citations in EconPapers (19)

Published in Journal of Development Economics, 2018, 135, pp.117 - 141. ⟨10.1016/j.jdeveco.2018.06.014⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01847018

DOI: 10.1016/j.jdeveco.2018.06.014

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