Labour and Energy Intensity: A Study of the Pulp and Paper Industries in India

Abstract

This chapter is an attempt to understand the relationship between the labour and energy intensity for firms drawn from pulp and paper industries in Indian manufacturing. Pulp and paper industry accounts for a considerable share of the industrial enterprises, production, employment and exports in the Indian economy and also one of the energy-intensive industries in Indian manufacturing. This chapter uses data from the Centre for Monitoring Indian Economy (CMIE), at the unit level for the period 1992–2000. Analysis from the cross-tabulation of energy and labour intensity of the firms in this industry suggests that energy intensity is higher for the BSE-listed firms; however, the labour intensity is found higher for the non-listed firms. Further, energy and labour intensity is higher for the domestic when compared to foreign firms. The econometric analysis of the energy intensity and other firm-specific characteristics suggests that labour and energy intensity has an inverted U-shape relationship, suggesting a substitution possibility between energy and labour for the pulp and paper industries in India. The listed firms are found to be more energy intensive as compared to the non-listed firms. More importantly, technology import is found negatively related to energy intensity of firms, suggesting that firms in these industries could be using technology import and knowledge sharing from their foreign collaborators for energy saving.