Effects of Energy Efficiency on Firm Productivity in Kenya’s Manufacturing Sector

There is concern about probable energy efficiency and economic performance trade-off, particularly in developing countries which often require more consumption to spur their economies. This study assesses the relation between total factor productivity Kenya’s manufacturing sector by applying a sample of firms World Bank Enterprise Survey. Energy intensity used as proxy for while estimated using Levinsohn-Petrin Algorithm. A dynamic panel data model applied analysis relationship at sub-sector firm size levels. The sub-sectors are: chemicals, pharmaceuticals plastics, food, textile garments paper other sub-sectors. Firm sizes interest small, medium large. findings show heterogeneity across Total also found be heterogeneous different sizes. estimates that general, significantly promotes productivity. Other factors promote include capital intensity, age, size, top manager’s years experience, foreign ownership exporting status. However, effect these variables varies suggest policies improve should accorded additional emphasis jointly with improvements