Credit Constraints, Energy Management Practices, and Investments in Energy Saving Technologies: German Manufacturing in Close-Up

46 Pages Posted: 21 Dec 2017

See all articles by Andreas Löschel

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Benjamin Johannes Lutz

ZEW – Leibniz Centre for European Economic Research

Philipp Massier

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research

Date Written: 2017

Abstract

We analyze the drivers and barriers that influence investments increasing the energy efficiency of firms' production processes or buildings in the German manufacturing sector based on microdata. In particular, we shed light on the relationship between financial barriers (e. g. credit constraints), information and knowledge (e. g. energy management practices), salience of energy-related topics, and the investments in energy saving technologies. A better understanding of firms' investment behavior regarding energy saving technologies is crucial to design efficient policy measures, which are necessary to achieve the imposed ambitious climate and energy policy targets. We use data from 701 structured telephone interviews in combination with commercial and confidential firm-level data. Our results suggest that energy management practices have a statistically significant positive relationship with investment decisions on energy saving technologies for production processes and buildings. Credit constraints are a barrier to investments in the energy efficiency of firms' production processes. Furthermore, high energy cost shares of heating or cooling, high energy intensity, energy self-generation and structured internal decision making processes influence the investments in energy efficiency positively.

Keywords: Energy efficiency, Credit constraints, Energy management, Manufacturing industry, Investment behavior

JEL Classification: D22, H23, Q41, Q48, Q58

Suggested Citation

Löschel, Andreas and Lutz, Benjamin Johannes and Massier, Philipp, Credit Constraints, Energy Management Practices, and Investments in Energy Saving Technologies: German Manufacturing in Close-Up (2017). ZEW - Centre for European Economic Research Discussion Paper No. 17-072, Available at SSRN: https://ssrn.com/abstract=3091625 or http://dx.doi.org/10.2139/ssrn.3091625

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

Benjamin Johannes Lutz

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Philipp Massier (Contact Author)

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

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