Increasing the productivity of manufacturing firms in Cameroon in a sustainable way: Renewable or non-renewable energy?

Abstract

The question of what energy form should guarantee firm productivity in the future is becoming increasingly important, considering the risk that the gradual depletion of the world’s non-renewable energy reserves poses to the continuity of productivity. This study aims to assess the effect of individual energy forms on productivity growth of manufacturing firms in Cameroon. This paper uses a two-stage stochastic frontier method to determine the energy form that is most likely to ensure the continuity of the productivity of manufacturing firms in Cameroon in the next few years. The data for the study came from the Annual Enterprise Surveys (EAE) conducted by the National Institute of Statistics of Cameroon (NIS) from 2012 to 2019. The analysis data constitute a panel of 288 representative firms. Factors that primarily explain firm productivity were value-added, renewable and non-renewable energy, capital, labor, and raw materials. The study analyzed the entire manufacturing industry, agri-food sector, and other manufacturing industries. Despite being a group estimate, individual firms are taken into account. Across the manufacturing industry in Cameroon, the results indicate that renewable energy is the most advantageous form. Indeed, this form would cause a 9.27% increase in productivity for a one percentage point increase. However, as the impact coefficients are insignificant, it is difficult to assess the contribution of non-renewable energy to firm productivity. Acknowledgments The authors would like to sincerely thank Atanase Yene for his invaluable support in this work, helpful comments, and suggestions on the previous draft of this paper. The usual disclaimer applies, and views are the authors’ sole responsibility.