Rising energy prices and productivity: short-run pain, long-term gain?

Abstract

Recent spikes in energy prices have raised concerns about the risks energy price shocks pose for firm performance. Using cross - country firm - level data, this Policy Brief shows that immediately following an energy price shock, firms reduce their capacity utilisation and their productivity declines, but that positive productivity gains may show up in the medium term. The potential for gains is higher in less energy - intensive sectors and for firms most likely to invest in energy saving technologies