Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296033 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 10944
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The transition from traditional labor intensive to modern capital intensive production is a key factor for industrial development. Using half a million observations from Indian manufacturing plants, I analyze the effects of a secular decrease in industrial electricity prices through the lens of a model with technology choices and complementarities between electricity and capital inputs. Using instrumental variables, I show how lower industrial electricity prices can increase both labor productivity and electricity productivity. Apart from positive effects on firm economic and environmental performance, cost-price pass through significantly benefitted consumers, and the productivity improvements limited increases in carbon emissions.
Subjects: 
industrial development
energy efficiency
electricity productivity
labor productivity
electricity prices
coal prices
incidence
climate policy
JEL: 
Q41
D24
D22
O14
Document Type: 
Working Paper
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