An empirical assessment of firm-level determinants and policy effectiveness on energy intensity in Nigeria’s manufacturing industry

This paper examines the impact of policy architectures and incentives designed to enhance energy efficiency in Nigeria’s industry. Based on simulated panel data capturing firm-level attributes, we employ fixed-effect regression specifications, complemented by sensitivity tests and robustness tests, to assess the effect of policy incentives on energy intensity, conditional on firm scale, technological preparedness, technology uptake, and energy prices. We discover that despite significantly decreasing energy usage per unit output when policy incentives exist, their effectiveness tends to diversify across firm scale and technological readiness. Capacity-building, technology innovation, and integration further stimulate efficiency improvements. The research underscores the need for differentiated industry-level policy instruments and the importance it attaches to institutional building as part of market-based reforms for sustainable industrial energy consumption. The paper provides relevant policy insights and lays the groundwork for future empirical evidence on developing countries sharing comparable challenges.