Effect of renewable energy on the technical efficiency of manufacturing firms in Cameroon

Abstract

The objective of this paper is to investigate the effect of renewable energy on the technical efficiency of manufacturing firms in Cameroon. The data for the study comes from the Annual Enterprise Surveys (AES) of the National Institute of Statistics (INS) for the period 2012–2019. The method used is the one-step Stochastic Frontier. The results show that the effect of renewable energy on the technical efficiency of manufacturing firms in Cameroon is negative in some cases and positive in others. Renewable energy has a negative effect on the technical efficiency of agro-food and chemical firms. The effect is, on the contrary, positive in the printing and textile sectors, as well as in the wood sector. On the other hand, the technical efficiency of manufacturing firms is around 40.57%. This last result means that manufacturing firms in Cameroon can increase their production by 59.43%, while keeping the same level of production factors.