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DOES CORRUPTION HINDER FIRM ENERGY EFFICIENCY? EVIDENCE FROM VIETNAM

Gaygysyz Ashyrov and Helen Poltimäe
Authors registered in the RePEc Author Service: Helen Poltimae ()

No 137, University of Tartu - Faculty of Economics and Business Administration Working Paper Series from Faculty of Economics and Business Administration, University of Tartu (Estonia)

Abstract: Energy efficiency is an important issue for developing countries like Vietnam, where the economy is thriving, but energy efficiency is still low. Firms should invest in energy efficiency measures, but the desired level is not reached. While the economic determinants of firms’ investments in energy efficiency have been researched, the role of the institutional setting has not gained so much attention. By employing data from Vietnamese small and medium-sized enterprises that has been administered in 2015, this article investigates how corruption, as a sign of institutional dysfunctionality, is associated with the energy efficiency in firms. Results of a bivariate binary probit estimation revealed that bribery increases the likelihood of energy efficiency environmentally friendly investments. However, findings from instrumental variable two stage least squares estimations demonstrate that bribery increases the cost of the investments. Hence, in the long run, corruption might have a deterring effect on energy efficiency investments by firms.

Keywords: corruption; energy efficiency; institutional setting; Vietnam (search for similar items in EconPapers)
Pages: 22 pages
Date: 2022
New Economics Papers: this item is included in nep-eff, nep-ene, nep-sea and nep-tra
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