Labour and Energy Intensity: A Study of Pulp & Paper Industries in India

This paper is an attempt to understand the relationship between the labour and energy intensity for firms drawn from pulp and paper industries in Indian manufacturing. Pulp and paper industry accounts for a considerable share of the industrial enterprises, production, employment and exports in the Indian economy and, one of the energy intensive industries in Indian manufacturing. This paper uses data from the Center for Monitoring Indian Economy (CMIE), at the unit level for the period 1992 to 2000. Analysis from the cross-tabulation of energy and labour intensity of the firms in this industry suggests that energy intensity is higher for the BSE listed firms however, the labour intensity is found higher for the nonlisted firms. Further, energy and labour intensity is higher for the domestic when compared to foreign firms. The econometric analysis of the energy intensity and other firm specific characteristics suggests that labour intensity has a negative relationship with energy intensity, suggesting a substitution possibility between energy and labour for the pulp and paper industries in India. Further we found that higher labour intensive firms are more energy intensive. Profitability of the firm emerged negatively related to energy intensity. The listed firms are found to be more energy intensives as compared to the non-listed firms. More importantly, technology import is found negatively related to the energy intensity of the firms, suggesting that firms in these industries could be using technology import and knowledge sharing from their foreign collaborators for savings on energy.