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A DEA approach for evaluating the relationship between energy efficiency and financial performance for energy-intensive firms in Korea

Title
A DEA approach for evaluating the relationship between energy efficiency and financial performance for energy-intensive firms in Korea
Authors
Moon, HanaMin, Daiki
Ewha Authors
민대기
SCOPUS Author ID
민대기scopus
Issue Date
2020
Journal Title
JOURNAL OF CLEANER PRODUCTION
ISSN
0959-6526JCR Link

1879-1786JCR Link
Citation
JOURNAL OF CLEANER PRODUCTION vol. 255
Keywords
Data envelopment analysisEnergy efficiencyMulti-period analysisFinancial performanceManufacturing industry
Publisher
ELSEVIER SCI LTD
Indexed
SCIE; SCOPUS WOS scopus
Document Type
Article
Abstract
In order to keep pace with the global trend of controlled and proper energy usage, the Korean government has enforced its energy-related regulations. However, the firms under these regulations are of the view that this approach may threaten their financial performance. In response to the growing interest of industry in Korea, this paper investigates whether energy efficiency has a positive relationship with firms' financial performance. For the purpose of accommodating various factors for measuring energy efficiency, we extended an existing two-stage network DEA (Data Envelopment Analysis) model that distinguished pure-energy efficiency and economy efficiency by developing a multi-period model with the aim to identify any change in efficiency during each period. An empirical analysis on Korean firms reveals interesting findings; First, while it is true that energy efficiency has changed over time, there is a difference in the magnitude of changes by industry. Firms in more energy-intensive industry have experienced more changes in their energy efficiency performance. Second, it is impossible to improve both categories of efficiency (i.e., pure-energy and economic efficiencies) at the same time. Thus, a firm should understand its current position in order to determine the extent and direction of efficiency improvements. Third, the energy efficiency has been found to have a significant relationship with financial performance. However, firms whose pure-energy efficiency was found to be relatively high did not always achieve better financial performance. (C) 2020 Elsevier Ltd. All rights reserved.
DOI
10.1016/j.jclepro.2020.120283
Appears in Collections:
경영대학 > 경영학전공 > Journal papers
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