Idiosyncratic Dynamics of Energy, GDP and GHG Emissions by Firm Size : Evidence from Korea

We analyze the interdependencies between energy usage, energy costs, renewable energy shares, economic growth, and GHG emissions in the Korean industrial sector. We employ a time-series panel vector model with a firm-level data set of over 240 companies from 2007-2016. Our empirical findings highlight a difference in dynamics between large companies and small and mid-size enterprises (SMEs). Our common findings reflect common knowledge, in that the energy use of companies is positively related to their energy costs and GHG emission levels, and a positive shock in GDP increases the energy usage and GHG emissions and has a positive relationship with renewable energy shares. However, this study demonstrates the disparate dynamics for different size companies in particular. In the case of large companies, the increase in energy consumption has a greater impact on their energy costs and GHG emissions than for SMEs. Moreover, it has a significant effect on GDP. In addition, the increase in renewable energy shares only has a significant influence on the energy consumption and GHG emission levels of large companies