Regional Disparities in Energy Productivity of Industries Iranian Manufacturing

Manufacturing sector is one of the most important energy consuming sectors.This study is set up to investigate the regional disparities in energy productivity of Iranian manufacturing industries during 2003-2013. In this regard, required data including output, labor, energy and value added come from the Statistical Center of Iran and capital stock is estimated by perpetual inventory method. After estimating the Cobb-Douglas production function using panel data, Generalized energy productivity of manufacturing industries for all provinces is calculated and compared. The results indicate that the level of energy productivity in many provinces has been very low and have not improved over time. Furthermore, energy productivity has decreased in many provinces for several years. Although the productivity heterogeneity between provinces has reduced, it has been mainly due to significant reduction in energy productivity of leading provinces. In addition, energy productivity has dropped in provinces with greater share of energy consumed. In sum, the results of this study indicate the necessity of improving energy planning in manufacturing industries