Exporters and Energy Efficiency: Evidence from Chilean Firms

We explore how exporting affects firms' energy consumption. One concern about international trade is its impact on the environment: when a firm exports, it expands its output, increasing pollution. This concern would be mitigated if exporters use “cleaner” technologies than non-exporters.Using Chilean data, we investigate whether exporting drives firms to substitute fuel, a dirty technology, for electricity, a clean technology. We do not find a significant difference between exporters and non-exporters, but there is mixed evidence of shifts away from fuel and towards electricity in new exporters. Via a propensity score matching exercise, we identify a causal link between export entry and the type of energy use: starting to export increases the cost share of electricity use by 1% and reduces the share of fuel use by 2% relative to non-exporters, but these differences fade away after two years.