Industrial energy efficiency and determinants in Vietnam: A stochastic frontier analysis using firm-level data

Abstract

In this study, we employ the Shephard energy distance function to evaluate the impacts of three broad aspects (i) government involvement, (ii) firm’s managerial behaviour and (iii) technology adoption on energy (in)efficiency. Using a true fixed-effect model with a firm-level dataset of eight major industries in Vietnam from 2011 to 2016, the results suggest that these three aspects influence energy efficiency at varying degrees. The novel finding is that government involvement in business improves energy efficiency in less efficient industries. Furthermore, import activities negatively impact energy efficiency while the quality of labour increases efficiency. However, production expansion investment worsens the energy inefficiency situation.