Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1035: Firm Productivity and Carbon Leakage: A Study of Swedish Manufacturing Firms

Shon Ferguson () and Mark Sanctuary ()
Additional contact information
Shon Ferguson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Mark Sanctuary: Beijer Institute of Ecological Economics

Abstract: This paper examines the intensive and extensive margins of carbon leakage. The analysis uses an increase in the Swedish electricity price to identify the impact on imports at the firm and product level. Our model of heterogenous firms predicts that higher domestic electricity prices lead firms to substitute towards imports of electricity-intense products.

Keywords: Firm heterogeneity; Carbon leakage; Energy; Importing

JEL-codes: D21; F18

31 pages, August 12, 2014

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