Event
Management Practices and Fuel Efficiency: Evidence from Firms in China
Wednesday 11 October 2023
Do well-managed firms use fuel less intensively in developing countries?
Using data from the World Management Survey, we investigate whether there are spillover benefits to fuel efficiency within firms in China. We find firms that are competently managed use substantially less electricity: a one standard deviation improvement in management practices is associated with a 14.9% reduction in usage intensity. The management premium is also significant after accounting for policy effect.
However, the correspondence is not significant for fossil fuels. The management quality is non-monotonically related to different quantiles of fuel intensity, where only firms with moderate-low consumption benefit from good management. Our results suggest potential linkages between managerial slack and competition, and we discuss possible reasons affiliated with opportunism, “multitasking problem”, and institutional design. Overall, there is evidence of management benefits to fuel efficiency but mainly restricted to electricity utilization.
Speaker: Prof. Jing Cao (Harvard University/Tsinghua University)
Host: Dr Sisi Sung