Does Energy Efficiency Affect Financial Performance?

Global climate change is a great challenge for human society at present.Taking the strategy of energy conservation and emissions reduction,low carbon green development and a sustainable path has become the choice of various sectors in China,especially the energy-intensive industries.Under the background of 13 th Five-Year Plan,energy-intensive enterprises are faced with huge pressure to improve energy efficiency and reducing energy consumption.This paper is based on Chinese energy-intensive enterprises and collecting panel data from 2010 to 2014 as samples,which in order to explore the effect of energy efficiency on corporate financial performance.After considering the related economic and management theories,which including stakeholder theory,corporate social responsibility,sustainable development theory and resource-based theory,as well as the existing conclusions in the relevant literature,we put forward the research hypothesis.This paper introduces the concepts and basic models of the DEA method which is used to calculate the total factor energy efficiency.According to the stakeholder theory,this paper has chosen six indicators to refer to financial performance,namely return on equity,return on assets,return on investment,return on invested capital,return on sales and tobin's q.These indicators are used to analyze the relationship between performance of the various stakeholders and energy efficiency.For energy efficiency,this paper adopts two indicators of energy intensity and total-factor energy efficiency to do regression analysis with financial performance respectively.It is the main part of the paper which is stated in chapter four and chapter five.According to the dependent variables,independent variables and control variables mentioned above,we select proper panel data model.After collecting data of energy-intensive firms,we do descriptive statistics of the financial performance data.And then we add energy intensity data and draw preliminary conclusion by descriptive statistics.At last,empirical analysis results of panel data regression shows that the energy intensity has negative relationship with return on equity,return on assets,return on investment,return on invested capital and return on sales.While it has no obvious significance with tobin's q.It means that the lower energy intensity,the better financial performance based on accounting measurement.Energy efficiency is positively affect the financial performance.In addition,we also test the interaction effect between energy intensity and company growth.We add an interactive item of energy intensity multiplied by the company's growth rate and find that high growth rates can increase the effect of energy intensity on financial performance.In the second part of analysis of the impact of total factor energy efficiency on financial performance,we select the DEA model to construct the total factor energy efficiency measurement model.We put input indicator and output indicator to calculate the total factor energy efficiency value.The results of analyzing total-factor energy efficiency index show that it has a significant positive influence on return on equity and return on assets.But it has no significant relationship with return on investment,return on invested capital,return on sales and tobin's q.It has a slight difference between the two results calculated by two indicators.It may because energy intensity indicator has a wider span,while the values of total-factor energy efficiency are limited in a range,and considering the substitution effect in production.Combining the conclusions of two methods,this paper reasonably conduct that the stakeholders who care about the energy reduction,the corresponding financial performances are positively affected by energy efficiency.Therefore,for the government,they should actively call for the participation of multi stakeholders to the action of energy saving.For the enterprise,reduce energy consumption can achieve the target of government effectively,and also help to their own development and provide motivation.