City Research Online

Abstract

Energy use for business operations accounts for a considerable amount of emissions. Improving firm energy efficiency is crucial to achieving the goal of emissions reduction. Meanwhile, information and communication technology (ICT) has altered how firms operate. There is a trend that firms in developed economies tend to subscribe to ICT services rather than owning ICT assets. In other words, ICT expenditure is becoming more popular than ICT investment. However, few researchers have studied the relationship between firm ICT behaviours and energy efficiency, and none has compared the effect of ICT expenditure with that of ICT investment on energy efficiency.

This study uses stochastic frontier analysis (SFA) to compare ICT investment and ICT expenditure and explores their impacts on firm energy efficiency. The study analyses panel data for over 1,000 firms in 33 industries for the years 2008-2015 from the UK Annual Business Survey. The results indicate that both firm ICT expenditure and firm ICT investment are significantly positively correlated with firm energy efficiency. Foreign firms and London firms are less energy efficient. Non-profit firms, firms paying the Climate Change Levy, and firms with high advertising costs are more energy efficient. Firm size has a mixed effect on energy efficiency.

Publication Type:	Other (Preprint)
Publisher Keywords:	ICT investment, ICT expenditure, Energy efficiency, Stochastic frontier analysis
Subjects:	G Geography. Anthropology. Recreation > GE Environmental Sciences H Social Sciences > HC Economic History and Conditions
Departments:	Bayes Business School Bayes Business School > Finance
SWORD Depositor:	Symplectic Administrator

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