Determinants of Enterprises’ Use of Energy Efficient Technologies: Evidence from Urban Ethiopia

Sied Hassen, Tagel Gebrehiwot and Tiruwork Arega

No 18-1, EfD Discussion Paper from Environment for Development, University of Gothenburg

Abstract: We conducted a cross-sectional survey of 8174 micro, small and medium enterprises from ten major urban areas in Ethiopia to study the determinants of the enterprises’ adoption of energy efficiency practices and technologies. For identification, we rely on a generalized ordered probit model. The findings reveal that, as the size of the enterprise becomes larger, it is more likely the enterprise will undertake energy efficient practices and technologies. This may be because larger enterprises are less likely to face constraints related to capital or knowhow to adopt these technologies. Further, enterprises which are clustered in an industrial zone are also more likely to use energy efficient technologies, revealing a spillover effect of being located in the same place. Enterprises with highly educated entrepreneurs are in favor of the adoption of the technologies. By contrast, entrepreneurs who perceive pro-environmental activities as unnecessary and costly are less likely to use energy efficient technologies. Our results imply that expansion of industrial zones and educational (informational) campaigns are important for enhancing micro and small enterprises’ adoption of energy efficient technologies.

Keywords: energy efficiency; enterprise; enterprise size; generalized ordered probit (search for similar items in EconPapers)
JEL-codes: D00 D21 Q40 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2018-02-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Determinants of enterprises use of energy efficient technologies: Evidence from urban Ethiopia (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunefd:2018_001

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