We inspect whether multinational supply chains bring energy efficiency gains to domestic firms active in a host country. Our theoretical model suggests that the presence of foreign firms in upstream manufacturing and energy industries expands the availability of high-quality inputs for downstream domestic firms, implying a reduction in their energy intensity. We test these theoretical predictions using data from Turkish manufacturing firms over the period 2010-2015. Our empirical analysis shows that domestic-owned firms in sectors that are more likely to buy manufacturing and energy inputs from foreign-owned suppliers tend to reduce their energy intensity, confirming environmental gains from FDI. When exploring the underlying mechanisms, we provide evidence that the presence of foreign firms in upstream sectors leads to an increase in the quality of available inputs which turns into improvements in downstream domestic firms’ energy efficiency.
Maggioni, D., Lo Turco, A., Imbruno, M., ENERGY EFFICIENCY GAINS FROM MULTINATIONAL SUPPLY CHAINS: EVIDENCE FROM TURKEY, <<Working Papers, Universita' Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali>>, 2023; (477): 1-37 [https://hdl.handle.net/10807/272634]
ENERGY EFFICIENCY GAINS FROM MULTINATIONAL SUPPLY CHAINS: EVIDENCE FROM TURKEY
Maggioni, Daniela;
2023
Abstract
We inspect whether multinational supply chains bring energy efficiency gains to domestic firms active in a host country. Our theoretical model suggests that the presence of foreign firms in upstream manufacturing and energy industries expands the availability of high-quality inputs for downstream domestic firms, implying a reduction in their energy intensity. We test these theoretical predictions using data from Turkish manufacturing firms over the period 2010-2015. Our empirical analysis shows that domestic-owned firms in sectors that are more likely to buy manufacturing and energy inputs from foreign-owned suppliers tend to reduce their energy intensity, confirming environmental gains from FDI. When exploring the underlying mechanisms, we provide evidence that the presence of foreign firms in upstream sectors leads to an increase in the quality of available inputs which turns into improvements in downstream domestic firms’ energy efficiency.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.