Rising energy prices and productivity: short-run pain, long-term gain?

Soaring energy prices have raised concerns about the risks energy price shocks pose for firms' performance and the green transition. This paper estimates the impacts of energy price changes on firms' productivity as well as their dynamics, distinguishing between the short and medium-to-lon...

Full description

Bibliographic Details
Main Author: André, Christophe
Other Authors: Costa, Hélia, Demmou, Lilas, Franco, Guido
Format: eBook
Language:English
Published: Paris OECD Publishing 2023
Series:OECD Economics Department Working Papers
Subjects:
Online Access:
Collection: OECD Books and Papers - Collection details see MPG.ReNa
LEADER 01980nma a2200265 u 4500
001 EB002168535
003 EBX01000000000000001306313
005 00000000000000.0
007 cr|||||||||||||||||||||
008 230706 ||| eng
100 1 |a André, Christophe 
245 0 0 |a Rising energy prices and productivity: short-run pain, long-term gain?  |h Elektronische Ressource  |c Christophe, André ... [et al] 
260 |a Paris  |b OECD Publishing  |c 2023 
300 |a 58 p.  |c 21 x 28cm 
653 |a Economics 
700 1 |a Costa, Hélia 
700 1 |a Demmou, Lilas 
700 1 |a Franco, Guido 
041 0 7 |a eng  |2 ISO 639-2 
989 |b OECD  |a OECD Books and Papers 
490 0 |a OECD Economics Department Working Papers 
028 5 0 |a 10.1787/2ce493f0-en 
856 4 0 |a oecd-ilibrary.org  |u https://doi.org/10.1787/2ce493f0-en  |x Verlag  |3 Volltext 
082 0 |a 330 
520 |a Soaring energy prices have raised concerns about the risks energy price shocks pose for firms' performance and the green transition. This paper estimates the impacts of energy price changes on firms' productivity as well as their dynamics, distinguishing between the short and medium-to-long term, using historical data. The analysis shows that following an energy price shock, firms adjust down their capacity utilisation, and their productivity declines. The estimates suggest that a 5% increase in energy prices reduces productivity by approximately 0.4% one year later. However, firms may display positive productivity gains in the medium term. Specifically, a shock corresponding to a 10% increase in energy prices is associated with an increase in productivity growth of around 0.9 p.p four years after the shock. These gains are more likely in less energy-intensive sectors, but tend not to materialise for larger shocks. There is some evidence that investment may be the channel behind productivity gains, the latter being larger for firms that had made investments in capital just before the shock