An analysis of energy intensity in Indonesian manufacturing

Djoni Hartono, Tony Irawan, Noer Azam Achsani

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)

Abstract

Many countries utilize their resources at optimal capacity in fostering countries' economic growth without any concern on environmental impact. Even though, the importance of environmental issue as one of the important aspects in sustainable development is fully understood, the economic growth remains as the main target. In Indonesia, industry is one of the important sectors both in term of its contribution to national output and national energy consumption. Based on Indonesian Statistic Bureau, industry is always at the top list of contributors of national energy consumption since 2000. This paper will employ decomposition analysis to calculate factors contribution towards energy intensity changes. Moreover, we will also conduct panel data method to analyze the determinants of energy intensity in the firm level data. The result suggests that during the period given, even though the level of energy intensity in the industry relatively worse than the national level but the condition of energy intensity in Indonesian industry varies across sub sectors. Moreover, the econometric analysis suggests that wage, age, capital intensity and share of capital owned by private have positive impacts on energy intensity; whereas sizes of firms, labor productivity and technology intensity have negative impacts on energy intensity.

Original languageEnglish
Pages (from-to)77-84
Number of pages8
JournalInternational Research Journal of Finance and Economics
Volume62
Publication statusPublished - 1 Feb 2011

Keywords

  • Decomposition
  • Energy intensity
  • Firm
  • Industry
  • Panel data

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