Advertisement

Energy Efficiency

, Volume 12, Issue 5, pp 1203–1217 | Cite as

The drivers of energy efficiency investments: the role of job flexibility

  • Antonio Fabio Forgione
  • Carlo MigliardoEmail author
Original Article
  • 106 Downloads

Abstract

The goal of this paper is to identify the characteristics of firms that drive the adoption of energy efficiency investments. Particular attention is given to the distortive effect of the adoption of fixed-term job contracts on firms’ orientation toward the investment in energy savings. From a panel data analysis, three regularities emerge. First, extensive use of job flexibility determines a lower incentive for firms to make an energy efficiency investment. Second, firm performance significantly ameliorates the expenditure in energy savings. Third, substantial differences in energy efficiency investment are present within sectors, international regions, regional areas, and firms of differing size.

Keywords

Energy efficiency investment Temporary employment Panel data 

JEL classification

C33 D22 J41 Q40 

Notes

Acknowledgments

We are grateful to the research department team of Bank of Italy for their support in the various remote elaborations. All errors are our own. The authors thank three anonymous referees for their critical comments and suggestions. Both authors contributed equally to each section of the article.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

References

  1. Acharya, V. V., Ramin, P. B., & Subramanian, K. W. (2014). Wrongful discharge laws and innovation. Review of Financial Studies, 27(1), 301–346.CrossRefGoogle Scholar
  2. Acs, Z. J., & Audretsch, D. B. (1987). Innovation, market structure, and firm size. The Review of Economics and Statistics, 69, 567–574.CrossRefGoogle Scholar
  3. Aghion, P., & Howitt, P. (2006). Appropriate growth policy: a unifying framework. Journal of the European Economic Association, 4(2–3), 269–314.CrossRefGoogle Scholar
  4. Allcott, H., & Greenstone, M. (2012). Is there an energy efficiency gap? The Journal of Economic Perspectives, 26(1), 3–28.CrossRefGoogle Scholar
  5. Allevi, E., Oggioni, G., Riccardi, R., & Rocco, M. (2013). A spatial competitive analysis: the carbon leakage effect on the cement industry under the European Emissions Trading Scheme. Bank of Italy, Temi di Discussione (Working Paper) No. 899. http://www.bancaditalia.it/pubblicazioni/temi-discussione/2013/2013-0899/en_tema_899.pdfGoogle Scholar
  6. Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29–51.zbMATHCrossRefGoogle Scholar
  7. Arvanitis, S., & Ley, M. (2013). Factors determining the adoption of energy-saving technologies in Swiss firms: an analysis based on micro data. Environmental and Resource Economics, 54(3), 389–417.CrossRefGoogle Scholar
  8. Banca d’Italia, Survey of Industrial and Service Firms (2010-2015). Survey of industrial and service firms, Supplements to the Statistical Bulletin. Rome. https://www.bancaditalia.it/statistiche/basi-dati/bird/imprese-industriali-e-servizi/index.html?com.dotmarketing.htmlpage.language=1.
  9. Bassanini, A., & Ernst, E. (2002). Labour market regulation, industrial relations and technological regimes: a tale of comparative advantage. Industrial and Corporate Change, 11(3), 391–426.CrossRefGoogle Scholar
  10. Blanchard, O., & Landier, A. (2002). The perverse effects of partial labour market reform: fixed-term contracts in France. The Economic Journal, 112(480), F214–F244.CrossRefGoogle Scholar
  11. Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143.zbMATHCrossRefGoogle Scholar
  12. Blundell, R., Bond, S., & Windmeijer, F. (2000). Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator. In B. Baltagi (Ed.), Nonstationary panels, panel cointegration and dynamic panels, Advances in econometrics (Vol. 15). Amsterdam: JAI Press, Elsevier Science.CrossRefGoogle Scholar
  13. Boyd, G. A., & Pang, J. X. (2000). Estimating the linkage between energy efficiency and productivity. Energy Policy, 28(5), 289–296.CrossRefGoogle Scholar
  14. Bugamelli, M., Cannari, L., Lotti, F., & Magri, S. (2012). Il gap innovativo del sistema produttivo italiano: Radici e possibili rimedi Questioni di Economia e Finanza, n. 121, Banca d’Italia, Roma. https://www.researchgate.net/profile/Alessandro_Arrighetti/publication/281972056_AArrighetti_e_A_Ninni_a_cura_di_2014_La_trasformazione_‘silenziosa’_Dipartimento_di_Economia_Universita_degli_Studi_di_Parma_Collana_di_Economia_Industriale_e_Applicata/links/56002d5308aeafc8ac8c4eab.pdf#page=204.
  15. Cameron, A. C., & Trivedi, P. K. (2005). Microeconometrics: methods and applications. Cambridge University Press.Google Scholar
  16. Cantore, N., Calì, M., & te Velde, D. W. (2016). Does energy efficiency improve technological change and economic growth in developing countries? Energy Policy, 92, 279–285.CrossRefGoogle Scholar
  17. Caroli, E., & Godard, M. (2016). Does job insecurity deteriorate health? Health Economics, 25(2), 131–147.CrossRefGoogle Scholar
  18. Chadi, A., & Hetschko, C. (2015). Flexibilization without hesitation? Temporary contracts and job satisfaction. Oxford Economic Papers, 68(1), 217–237.CrossRefGoogle Scholar
  19. Chen, Y. S., Lai, S. B., & Wen, C. T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331–339.CrossRefGoogle Scholar
  20. Christiano, L. J., Eichenbaum, M., & Evans, C. L. (2005). Nominal rigidities and the dynamic effects of a shock to monetary policy. Journal of Political Economy, 113(1), 1–45.CrossRefGoogle Scholar
  21. Coad, A., Segarra, B. A., & Teruel, M. (2013). Innovation and firm growth: does firm age play a role? Research Policy, 45(2), 387–400.CrossRefGoogle Scholar
  22. Cooremans, C. (2012). Investment in energy efficiency: do the characteristics of investments matter? Energy Efficiency, 5(4), 497–518.CrossRefGoogle Scholar
  23. Costa-Campi, M. T., García-Quevedo, J., & Segarra, A. (2015). Energy efficiency determinants: an empirical analysis of Spanish innovative firms. Energy Policy, 83, 229–239.CrossRefGoogle Scholar
  24. De Canio, S. J., & Watkins, W. E. (1998). Investment in energy efficiency: do the characteristics of firms matter? Review of Economics and Statistics, 80(1), 95–107.CrossRefGoogle Scholar
  25. De Marchi, V. (2012). Environmental innovation and R&D cooperation: empirical evidence from Spanish manufacturing firms. Research Policy, 41(3), 614–623.CrossRefGoogle Scholar
  26. Del Río, P., Peñasco, C., & Romero-Jordán, D. (2015). Distinctive features of environmental innovators: an econometric analysis. Business Strategy and the Environment, 24(6), 361–385.CrossRefGoogle Scholar
  27. Demirel, P., & Kesidou, E. (2011). Stimulating different types of eco-innovation in the UK: Government policies and firm motivations. Ecological Economics, 70(8), 1546–1557.CrossRefGoogle Scholar
  28. Eberly, J., Rebelo, S., & Vincent, N. (2012). What explains the lagged-investment effect? Journal of Monetary Economics, 59(4), 370–380.CrossRefGoogle Scholar
  29. Faiella, I., & Mistretta, A. (2014). Firms’ energy costs and competitiveness in Italy. Bank of Italy Occasional Paper, (214). https://ideas.repec.org/p/bdi/opques/qef_214_14.html.
  30. Franceschi, F., & Mariani, V. (2015). Flexible labor and innovation in the Italian industrial sector. Industrial and Corporate Change, 25(4), 633–648.CrossRefGoogle Scholar
  31. Franco, D. (2012). Indagine conoscitiva sulle caratteristiche e sullo sviluppo del sistema industriale, delle imprese pubbliche e del settore energetico. Bank of Italy. mimeo. https://www.bancaditalia.it/pubblicazioni/interventi-vari/int-var-2012/Franco_26092012.pdf.
  32. Fuentelsaz, L., Gomez, J., & Polo, Y. (2003). Intra-firm diffusion of new technologies: an empirical application. Research Policy, 32(4), 533–551.CrossRefGoogle Scholar
  33. Green, F. (2011). What is skill? An inter-disciplinary synthesis. Centre for Learning and Life Changes in Knowledge Economies and Societies. https://pdfs.semanticscholar.org/06e1/2c7877b73f84acbe5f0e08f2a51bbcdae42d.pdf.
  34. Hair, J., Black, W., Babin, B., Anderson, R., & Tatham, R. (2009). Multivariate data analysis (7th ed.). New Jersey: Pearson Education.Google Scholar
  35. Hall, B. H. (2010). The financing of innovative firms. Review of Economics and Institutions, 1(1), 4.Google Scholar
  36. Hamilton, J. D. (1983). Oil and the macroeconomy since World War II. The Journal of Political Economy, 91(2), 228–248.CrossRefGoogle Scholar
  37. Horbach, J., Rammer, C., Rennings, K. (2012). Determinants of eco-innovations by type of environmental impact: The role of regulatory push/pull, technology push and market pull. Ecological economics, 78, 112–122.Google Scholar
  38. Hrovatin, N., Dolšak, N., & Zorić, J. (2016). Factors impacting investments in energy efficiency and clean technologies: empirical evidence from Slovenian manufacturing firms. Journal of Cleaner Production, 127, 475–486.CrossRefGoogle Scholar
  39. Huber, P. J. (1967). The behavior of maximum likelihood estimates under nonstandard conditions. In Proceedings of the Fifth Berkeley Symposium on Mathematical Statistics and Probability (Vol. 1(1), pp. 221–233). Berkeley: University of California Press.Google Scholar
  40. Ichino, A., & Riphahn, R. T. (2005). The effect of employment protection on worker effort: absenteeism during and after probation. Journal of the European Economic Association, 3(1), 120–143.CrossRefGoogle Scholar
  41. IEA (2008). Energy technology perspectives – scenarios and strategies to 2050. Paris. http://www.iea.org/media/etp/etp2008.pdf.
  42. IEA (2009). How the energy sector can deliver on a climate agreement in Copenhagen? World Energy Outlook 2009. Special Report. https://www.iea.org/publications/freepublications/publication/climate_change_excerpt.pdf.
  43. IEA. (2013). Key world energy statistics 2013. Paris: International Energy Agency https://www.iea.org/publications/freepublications/publication/KeyWorld2017.pdf.Google Scholar
  44. Jacob, B. A. (2013). The effect of employment protection on teacher effort. Journal of Labor Economics, 31(4), 727–761.CrossRefGoogle Scholar
  45. Karshenas, M., & Stoneman, P. L. (1995). Technological diffusion. In P. Stoneman (Ed.), Handbook of the economics of innovation and technological change (pp. 265–297). Oxford: Blackwell.Google Scholar
  46. Kastl, J., Martimort, D., & Piccolo, S. (2013). Delegation, ownership concentration and R&D spending: evidence from Italy. The Journal of Industrial Economics, 61(1), 84–107.CrossRefGoogle Scholar
  47. Khazzoom, D. J. (1980). Economic implications for mandated efficiency in standards for household appliances. The Energy Journal, 1(4), 21–40.Google Scholar
  48. Kleinknecht, A. (1998). Is labor market flexibility harmful to innovation? Cambridge Journal of Economics, 22(3), 387–396.CrossRefGoogle Scholar
  49. Kleinknecht, A., van Schaik, F. N., & Zhou, H. (2014). Is flexible labour good for innovation? Evidence from firm-level data. Cambridge Journal of Economics, 38(5), 1207–1219.CrossRefGoogle Scholar
  50. Lotti, F., & Viviano, E. (2012). Why hiring temporary workers?. Banca d’Italia, mimeo. http://www.aiel.it/page/old_paper/Lotti_Viviano.pdf.
  51. Masini, A., & Menichetti, E. (2012). The impact of behavioral factors in the renewable energy investment decision making process: conceptual framework and empirical findings. Energy Policy, 40, 28–38.CrossRefGoogle Scholar
  52. Montalvo, C. (2008). General wisdom concerning the factors affecting the adoption of cleaner technologies: a survey 1990–2007. Journal of Cleaner Production, 16(1), S7–S13.CrossRefGoogle Scholar
  53. Mulder, P., Groot, H. L. F., Pfeiffer, B. (2014). Dynamics and determinants of energy intensity in the service sector: A cross-country analysis, 1980–2005. Ecological Economics, 100, 1–15.Google Scholar
  54. Murovec, N., Erker, R. S., & Prodan, I. (2012). Determinants of environmental investments: testing the structural model. Journal of Cleaner Production, 37, 265–277.CrossRefGoogle Scholar
  55. Porter, M. E., & Van der Linde, C. (1995). Toward a new conception of the environment-competitiveness relationship. The Journal of Economic Perspectives, 9(4), 97–118.CrossRefGoogle Scholar
  56. Ratti, R. A., Seol, Y., & Yoon, K. H. (2011). Relative energy price and investment by European firms. Energy Economics, 33(5), 721–731.CrossRefGoogle Scholar
  57. Roodman, D. (2009a). How to do xtabond2: an introduction to difference and system GMM in Stata. The Stata Journal, 9(1), 86–136.CrossRefGoogle Scholar
  58. Roodman, D. (2009b). A note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics, 71(1), 135–158.CrossRefGoogle Scholar
  59. Sadath, A. C., & Acharya, R. H. (2015). Effects of energy price rise on investment: firm level evidence from Indian manufacturing sector. Energy Economics, 49, 516–522.CrossRefGoogle Scholar
  60. Samaniego, R. M. (2006). Employment protection and high-tech aversion. Review of Economic Dynamics, 9(2), 224–241.CrossRefGoogle Scholar
  61. Scarpetta, S., & Tressel, T. (2004). Boosting productivity via innovation and adoption of new technologies: any role for labor market institutions? (Vol. 3273). World Bank Publications. https://openknowledge.worldbank.org/handle/10986/14748.
  62. Schleich, J., & Gruber, E. (2008). Beyond case studies: barriers to energy efficiency in commerce and the services sector. Energy Economics, 30(2), 449–464.CrossRefGoogle Scholar
  63. Stucki, T., & Woerter, M. (2016). Intra-firm diffusion of green energy technologies and the choice of policy instruments. Journal of Cleaner Production, 131, 545–560.CrossRefGoogle Scholar
  64. Taylor, R. P., Govindarajalu, C., Levin, J., Meyer, A. S., & Ward, W. A. (2008). Financing energy efficiency: lessons from Brazil, China, India, and beyond. Energy sector management assistance program (ESMAP). Washington, DC World Bank. https://openknowledge.worldbank.org/handle/10986/6349.
  65. Urpelainen, J. (2011). Export orientation and domestic electricity generation: effects on energy efficiency innovation in select sectors. Energy Policy, 39(9), 5638–5646.CrossRefGoogle Scholar
  66. Van Zon, A., & Yetkiner, I. H. (2003). An endogenous growth model with embodied energy-saving technical change. Resource and Energy Economics, 25(1), 81–103.CrossRefGoogle Scholar
  67. Veugelers, R. (2012). Which policy instruments to induce clean innovating? Research Policy, 41(10), 1770–1778.CrossRefGoogle Scholar
  68. Wachsen, E., & Blind, K. (2016). More labour market flexibility for more innovation? Evidence from employer–employee linked micro data. Research Policy, 45(5), 941–950.CrossRefGoogle Scholar
  69. White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48, 817–830.MathSciNetzbMATHCrossRefGoogle Scholar
  70. Woo, C., Chung, Y., Chun, D., Han, S., & Lee, D. (2014). Impact of green innovation on labor productivity and its determinants: an analysis of the Korean manufacturing industry. Business Strategy and the Environment, 23(8), 567–576.CrossRefGoogle Scholar
  71. Worrell, E., Laitner, J. A., Ruth, M., & Finman, H. (2003). Productivity benefits of industrial energy efficiency measures. Energy, 28(11), 1081–1098.CrossRefGoogle Scholar
  72. Zhang, S., Lundgren, T., & Zhou, W. (2016). Energy efficiency in Swedish industry: a firm-level data envelopment analysis. Energy Economics, 55, 42–51.CrossRefGoogle Scholar
  73. Zhou, H., Dekker, R., & Kleinknecht, A. (2011). Flexible labor and innovation performance: evidence from longitudinal firm-level data. Industrial and Corporate Change., 20(3), 941–968.CrossRefGoogle Scholar

Copyright information

© Springer Nature B.V. 2018

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MessinaMessinaItaly

Personalised recommendations