Renewable energy use and export performance of manufacturing firms: Panel evidence from six industries in India

Abstract

We measure renewable energy intensity and examine its impact on export performance of Indian manufacturing firms from six industries over the panel period 2011–2021. Contrary to the negative impact of renewable energy use on export performance in macroeconomic studies, our firm-level panel analysis suggests that the impact of renewable energy usage on export intensity could differ from industry to industry. We use both system dynamic panel estimation and fixed effects with Driscoll and Kraay standard errors to correct for cross-sectional dependence. Under both the methods, our results suggest to the positive impact of renewable energy usage on export intensity in most of the industries analysed. However, the magnitude of effect differs from industry to industry. This has heterogeneous implication for energy policy for different industries. Use of renewable energy especially in hard-to-abate sectors will need special attention by the governments and policymakers in India.