Vietnam's processing and manufacturing industry-energy efficiency and total factor productivity
Keywords:
Energy efficiency, Processing and manufacturing industry, The generalized method of moments (GMM), Total factor productivity (TFP).Abstract
This study analyzes the relationship between total factor productivity (TFP) and energy efficiency based on firm-level data from Vietnam’s processing and manufacturing sector during the period 2011–2022. Energy efficiency is proxied by energy intensity, calculated as the ratio of energy consumption to value added. Applying the Generalized Method of Moments for panel data estimation, the study finds a positive association between improved energy efficiency and TFP. Additionally, factors such as the capital-to-labor ratio and firm age positively influence TFP, while inflation has a negative impact. The study recommends policies including enterprise support programs, energy efficiency-linked financial incentives, regulatory measures, corporate governance improvements, inflation control, and maintaining macroeconomic stability to foster TFP growth in the enterprise sector.
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