Does energy intensity affect labour productivity in Indian firms? preliminary estimates

Abstract

Micro, small and medium enterprises are viewed as engines of economic growth in India. The present study examines if energy is an important factor in productivity of firms using energy intensity as a measure of efficiency. Using firm-level data from 5760 micro, small, medium and large enterprises for 2007–2008, the study estimates the relationship among labour productivity, energy intensity, capital intensity, age and size of the firm. The results show that significant differences in energy efficiency exist among micro, small, medium and large enterprises, and highlight the scope for improving energy efficiency to improve productivity.