Abstract
Energy intensity and efficiency are at the core of the green transition. Using a new firm-level complexity index, this column shows that product upgrading and access to trade with advanced trading partners drive firms to adopt energy-efficient technologies. This is especially the case for small firms, which experience significant energy intensity reductions. Though large firms can use markups to fund upgrades, small firms do not gain market power from increased complexity (instead, they face stronger competition), indicating a need for policy support to adopt cleaner technologies. However, firm debt significantly reduces trade-induced benefits through upgrading.
| Original language | English |
|---|---|
| Specialist publication | VOXEU |
| Publisher | The Centre for Economic Policy Research (CEPR) |
| Publication status | Published - 2 Jan 2025 |
Keywords
- Energy use
- Energy efficiency