Energy efficiency in Vietnamese enterprises: tai 188bet predominance of gas consumers

Summary

Energy inefficiency is a serious issue in tai 188bet Vietnamese industry, which is tai 188bet sector consuming tai 188bet most energy in Vietnam. This article adopts stochastic frontier analysis (SFA) to evaluate tai 188bet factors that influence tai 188bet energy inefficiency in Vietnamese enterprises. Under tai 188bet evaluation for tai 188bet tile industry, tai 188bet empirical results indicate that there are many factors having significant impacts on energy inefficiency, including fuel type, ownership structure, size of firms, labour quality, energy price and import activities. Related to tai 188bet fuel type indicator, this article discovers that tai 188bet level of energy inefficiency in firms using gases is 1.258 times lower than in firms using other fuels. That is tai 188bet obvious evidence for tai 188bet better performance of gas consumers in term of energy efficiency.

Key words: Energy efficiency, stochastic frontier, SFA, gas consumers, Vietnamese industrial sector, industry energy efficiency.

1.    Introduction

tai 188bet industrial sector plays an important role in tai 188bet development of tai 188bet Vietnamese economy, contributing tai 188bet largest share (38%) of tai 188bet country’s GDP [1]. Corresponding to tai 188bet contribution rate of GDP, tai 188bet industrial sector accounts for tai 188bet highest proportion of energy consumption (38.2%) in total energy demand [2]. Nevertheless, one can see that tai 188bet inefficient energy usage in tai 188bet industrial sector is one of tai 188bet main reasons for overall energy inefficiency in Vietnam. Table 1 implies that, to generate USD 1,000 of GDP, tai 188bet Vietnamese industrial sector consumes tai 188bet highest amount of energy in comparison with many countries. More precisely, energy use per GDP of tai 188bet Vietnamese industry is 3 times higher than tai 188bet average energy consumption of tai 188bet world. It is also 1.7 times higher than tai 188bet average level of other developing countries, including Thailand, China, Malaysia and Indonesia.

According   to   tai 188bet   industrialisation   strategy   of   tai 188bet Vietnamese Government, it is expected that tai 188bet Vietnamese  economy  and  tai 188bet  energy  consumption   will maintain similarly rapid growth rates up to 2020. Therefore, a possible consequence is that Vietnam may experience energy shortage soon or later. Reduction  of tai 188bet energy inefficiency, which is claimed as tai 188bet national target by tai 188bet Vietnamese government, becomes  an urgent mission. It is necessary to focus on minimising tai 188bet energy inefficiency in tai 188bet industrial sector, especially in industries consuming high energy, such as tile production, steel industry, or cement production. Hence, tai 188bet goals of this article are to evaluate tai 188bet energy inefficiency and to identify tai 188bet potential factors causing energy inefficiency  in tai 188bet industrial sector. tai 188bet approach and tai 188bet results of this article also can help tai 188bet Government to find better strategies for improving energy efficiency.

Table 1. Comparison of energy consumption per GDP by industry

Furthermore, tai 188bet Vietnamese government is pursuing tai 188bet goal of sustainable development, in which economic development must be accompanied by energy security and environment protection. It implies that cleaner fuels like LPG or NG are more encouraged than tai 188bet other types. Thus, this article also aims to evaluate tai 188bet difference in energy efficiency between companies consuming gases (including LPG and NG) and those consuming other fuels.

To tai 188bet best of our knowledge, there is hardly any published study to assess tai 188bet factors affecting energy efficiency in tai 188bet Vietnamese industry. Therefore, this article is a significant contribution to an overlooked research field in energy economics in Vietnam. In addition, empirical researches assessing energy efficiency can  be classified  into  three  main  approaches:  energy intensity, data envelopment analysis (DEA) and stochastic frontier analysis (SFA). While there are numerous studies applying energy intensity or DEA to measure energy inefficiency, thereareonlyfewstudiesapplying SFAandallmainlyfocus on country/region level. Therefore, another important contribution of this article is to explore tai 188bet performance of SFA in energy economics with firm-level data.

tai 188bet remaining parts of this article are organised as follows. Section 2 describes tai 188bet methodology employed  in this article. Section 3 explains tai 188bet estimation and tai 188bet data/variables collected to implement tai 188bet model. Section 4 provides tai 188bet quantitative analysis. Section 5 discusses tai 188bet policy implications of tai 188bet empirical results. We summarise our main findings in Section 6.

2.    Analytical framework

Boyd [3] points out SFA can evaluate energy efficiency either through a normal statistic function or through production function. tai 188bet former application is adopted to evaluate energy efficiency for OECD countries and for US residents by Filippini and Hunt [4, 5]. tai 188bet later approach, so- called energy input distance function, is employed by Zhou, Ang and Zhou [6], Honma and Hu [7] and Lin and Long [8]. Following Zhou, Ang and Zhou [6] and Lin and Long [8], this article employs tai 188bet energy input distance function approach with tai 188bet assumption of Translog function.

   Technology inefficiency and input distance function

All production processes are understood as processes to transform inputs into outputs under specific technologies. tai 188bet transformation relationship between inputs and outputs can be described by a mathematical formula, so-called tai 188bet production function. A production function can be written in tai 188bet form of F(X, Y) = 0, where X is an M dimension non-negative input vector and Y is an N dimension non-negative output vector. In case of production with only one output, tai 188bet production function will be Y = f(X1, X2, ..., Xn) where tai 188bet function f(.) represents a technology governing tai 188bet production process.

Based on technology of production, there are several types of production function adopted in economic analysis, in which Cobb-Douglas and Translog production functions  are tai 188bet most well-known. tai 188bet Cobb-Douglass function form is described in normal form as    or in natural logarithm form as where tai 188bet parameters βi satisfy that   and  for all and 
(A is a constant number). tai 188bet Translog function form can be explained as where Y is output of production , Xi is inputs of production,   are parameters and    .

In tai 188bet literature of production function, tai 188bet relation between inputs and output is assumed as tai 188bet frontier of attainable production set. It means, with given inputs Xi,   a firm always produces tai 188bet maximum possible output. Meanwhile, given output Y and all other inputs  Xj (where  j ≠ i), tai 188bet value of input Xi is always determined at tai 188bet minimum level. However, in tai 188bet production efficiency literature, that assumption will be relaxed. Thus, with given inputs, firms may produce less than tai 188bet maximum possible output(s), or firms may need more than tai 188bet necessary level of inputs to produce tai 188bet given output. In those cases, firms have technical inefficiency.

Figure 1 provides a graphic demonstration of a technically inefficient production. Point A that locates under production frontier Y = f(X) represents that a firm is not technically efficient. tai 188bet inefficiency of firm A can be explained in two ways based on tai 188bet input-oriented or tai 188bet output-oriented measure. From tai 188bet view of input-oriented measure, tai 188bet observed output level (Y0) can be technically produced consuming fewer inputs (X* instead of X0). In tai 188bet graph, firm A can become efficient by reducing inputs and move to point C on production frontier. tai 188bet distance AC indicates tai 188bet wasted inputs due to technical inefficiency and it is tai 188bet basis to measure input-oriented (IO) technical inefficiency. More specifically, IO technical inefficiency is measured by    which is tai 188bet proportion of inputs that firms can reduce to become efficient. From tai 188bet view of output-oriented measure, there is a possibility to technically attain higher level of output (Y* instead of Y0) for given inputs (X0), so that firm A can move to point B on tai 188bet production frontier. tai 188bet gap AB in tai 188bet graph implies tai 188bet output loses out because of technical inefficiency and it is tai 188bet basis to measure output- oriented (OO) technical inefficiency. More precisely, OO technical inefficiency is measured by   which is tai 188bet proportion of output that firms can increase to become efficient.

 Figure 1. Input-oriented and output-oriented technical efficiency

In mathematics, tai 188bet input-oriented inefficiency can be explained as In that equation, uX is input-oriented inefficiency, Dl(.) ≥ 1 is tai 188bet input distance function, homogenous of degree one of inputs vector x, A(Y) is tai 188bet required set of inputs that is feasible to produce tai 188bet observed outputs Y. Therefore, a firm will be considered as efficient if value of Dl is equal to 1.

    Energy input distance function

Let E is vector of energy demand to produce observed vector of outputs Y for given vector of non- energy inputs X, tai 188bet energy input distance function is stated that:

 More specifically, for a general production with two non-energy inputs being capital (K) and labor (L), take a natural logarithm for both sides of equation (2) we have:
     
Let   as energy inefficiency in log form of input distance function, equation (3) can be re-written:
               
 It  is  possible  to  expand  equation  (4)  with  assumption  of Cobb-Douglas production function form or Translog production function form as in equation (5) and equation (6), respectively.

Where v is statistical error,    is measured by tai 188bet fraction between total capital, K and energy consumption, E. Variable is measured by tai 188bet fraction between total labour, L and energy consumption, E. tai 188bet non-negative energy inefficiency, uE is measured in log form of input distance function uE Ξ lnDE(Y, K, L; E), where tai 188bet higher value of uE leads tai 188bet lower value of ln(1/ Eit) and it is corresponding to tai 188bet higher energy consumption, E.

Thereafter,   energy   inefficiency   can   be   determined   by adopting standard SFA estimation methods to estimate equations (5) and (6). Furthermore, this article also evaluates tai 188bet factors affecting energy inefficiency of firms through tai 188bet equation uEit = u(zit) where zit is a vector of exogenous variables such as energy price, tai 188bet enterprise size or tai 188bet ownership structure. Both of above goals can be achieved simultaneously by tai 188bet one-step estimation approach that is widely applied in recent researches. tai 188bet detail of tai 188bet estimation method will be described as in tai 188bet next section.

3.    Estimation and data

    Estimation

Since tai 188bet development of tai 188bet estimation method for panel data by Pitt and Lee [9], tai 188bet literature of SFA has steadily improved with several methods. This article follows tai 188bet procedure of Battese and Coelli  [10],  which  is  tai 188bet  most  adopted  method in empirical researches, to  evaluate  tai 188bet  energy  inefficiency  via energy distance function. In addition, this article follows suggestion of Lin and Long [8] to setup model with assumption of Translog production function form. tai 188bet empirical model can be expressed as:

(10)
 
In this article, tai 188bet Translog setting will be adopted Equation (7) is energy frontier equation that is identical with equation (6).      is  energy  inefficiency,     is tai 188bet statistical error. Equation (8) is inefficiency effects equation where zit is vector of exogenous variables (will be clarified in Section  3.2).     is  random  variable  truncated at point  z , where is vector of parameters which may include constant term. Equation (9) is to control heteroscedasticity in UEU, where    is variance of . Equation (10) is to control heteroscedasticity in, where is variance of. Variable   t is time variable (if any) and    are vectors of parameters. tai 188bet parameters of all equations are estimated simultaneously by programme  developed  by  Kumbhakar, Wang,  and Horncastle [11] on tai 188bet platform of Stata software.

    Data

In  order  to  provide  an  in-depth  analysis   and   based  on availability of tai 188bet data, we  narrow  down  tai 188bet  scope  of  tai 188bet study focusing on tai 188bet tile industry for our empirical analysis. tai 188bet data we used in this article is tai 188bet  latest  firm- level panel data of tai 188bet Vietnamese tile industry, which covers 574 firms throughout tai 188bet territory of  Vietnam  over  tai 188bet period of three years. tai 188bet entire data is collected from tai 188bet Business Survey conducted by  tai 188bet  General  Statistics  Office  of Vietnam annually. For tai 188bet estimation of energy frontier equations, we use four panel series which are: (1) aggregate energy consumption, (2) total capital, (3) total labour that participates in tai 188bet production process, and (4) tai 188bet value  added. Meanwhile, for inefficiency effects equations we include  six  variables:  (1)  fuel  type,  (2)  ownership  structure,(3) enterprise size, (4) average price of energy, (5) quality of labour, and (6) import activity.

    Variables in energy frontier equation

Production process in tile companies consumes assorted energies including electricity, coal, gasoline, diesel, LPG and natural gas. In addition, tai 188bet combination of energies varies from firm to firm. Therefore, we adopt tai 188bet widely accepted approach that aggregates energy consumption which is tai 188bet summation of tai 188bet heating value of all consumed energies for producing purpose. Aggregate energy consumption, E, is measured in billion British thermal unit (billion Btu).

Firms’ total capital are collected as variable K, which is measured in billion Vietnamese dongs (billion VND) based on tai 188bet year 2010. Variable k, then, is derived by fraction between K and E, before taking natural logarithm to fit with setup of tai 188bet model mentioned above.

Total labour that participates in tai 188bet production process is denoted by L and is presented in number  of employees. We take tai 188bet fraction between L and E to derive variable l, then take natural logarithm to be suitable with tai 188bet setup of tai 188bet SFA model.

tai 188bet value added of tile production is collected as variable Y, before taking natural logarithm to fit with tai 188bet setup of tai 188bet SFA model. Variable is measured in billion Vietnamese Dong (billion VND)i.

tai 188bet following discussions will explain tai 188bet potential factors which might affect tai 188bet energy inefficiency in tai 188bet Vietnamese tile industry, which includes fuel type, ownership structure, enterprise size, price of energy, labour quality and import activity.

    Fuel type

tai 188bet most important purpose  of  this  article  is  to determine tai 188bet difference in energy efficiency between firms using conventional fuels (e.g. coal, diesel) and firms using cleaner energies (e.g. LPG or NG). It is an well-known fact that use of gases leads to higher performance than use of other fuels. However, under tai 188bet same conditions of tai 188bet production (same amount of output, same enterprise size, and quality of labour, etc) tai 188bet difference in energy efficiency of using gas and of using other fuels is still ambiguous.

In order to assess tai 188bet effect of fuel type on energy inefficiency, this article adopts tai 188bet dummy variable type, where type equal to 0 represents firms using gases and type equal to 1 is for production without gases.

    Ownership structure

Many tile companies  have  state-owned  share  in capital, and it is understood that state-owned  firms are associated with inefficiency [12]. In order   to capture that impact, this article uses tai 188bet dummy variable gov_sh as an exogenous, where state-related firm has gov_sh equal to 1 and otherwise, gov_sh is equal to 0.

    Enterprise size

tai 188bet large-sized firms are usually considered more efficient than smaller ones since they are able to purchase better equipment and to recruit more productive employees [8]. However, since large-sized firms have  more advantages to access energy resources, they may have less incentive to consume energies efficiently than smaller ones. This article evaluates tai 188bet difference in energy efficiency between different sizes of firms through dummy variable size. tai 188bet large-sized firms (represented by size equal to 0) and small and medium-sized firms (SMEs, represented by size equal to 1) are defined in tai 188bet Vietnamese Government’s Decree No. 56/2009/ND-CP. i There are 3 out of 1,722 observations in data set which have negative or zero value added and will be automatically excluded when we take log. Since they are very small in number, they do not affect tai 188bet results of estimation.

    Average price of energy

tai 188bet price of energy is an important factor in energy efficiency analysis, where tai 188bet higher tai 188bet energy price is, tai 188bet higher energy efficiency might be. Due to tai 188bet facts that tile firms use many types of energies simultaneously and there is no competitive energy market in Vietnam, tai 188bet use of unit price becomes inappropriate. Thus, this article employs tai 188bet average price that is calculated by tai 188bet division of total cost for energies and aggregate energy consumption determined before. Thereafter, they will be transformed to natural log form and be denoted as lp.

    Quality of labour

Economists accept that tai 188bet quality of labour is conducive to improving  production  efficiency.  This article employs tai 188bet average salary, lql, to investigate tai 188bet impact of labour quality on energy inefficiency, in which higher average salary implies higher quality of labour.  Data of firms’ salary are measured in million Vietnamese dongs per person and they are transformed into natural logarithm form as lql.

   Import activity

It is believed that firms having to import materials/ fuels will have more incentive to control its production to be more efficient than other firms. This article creates a dummy variable im to investigate tai 188bet difference in energy inefficiency between firms having import activities (im equals to 1) and others (im equals to 0). Statistical summary of tai 188bet above variables is given in Table 2.

4.    Quantitative analysis

tai 188bet estimation results displayed inTable 3 indicate that all models are valid with high significance in parameters. In energy frontier equation, tai 188bet estimated coefficients are strongly significant at tai 188bet 0.1% significance level. Besides that, in inefficiency effects equation, almost estimated coefficients are highly significant at level of 5% or even at level of 0.1%.There is only one exception - tai 188bet coefficient of im is only significant at tai 188bet level of 27% in case of Translog function. Due to most of materials for tai 188bet tile industry can be supplied by tai 188bet domestic market, not many companies have import activities. Thus, tai 188bet significance level of 27% and tai 188bet appropriate sign of coefficient (negative sign) are noticeable results to convince that we should not drop it out of model.

Table 3 also shows that there is heteroscedasticity in inefficiency term but no heteroscedasticity in statistical error.  While  a  few  coefficients   in   variance   equation of inefficiency term are not really significant, other coefficients are highly significant at level of 0.1%, so that circumstance is still acceptable.

It is noteworthy that tai 188bet parameters of exogenous variables in tai 188bet inefficiency effects equation displayed in Table 3 are valueless for economists.  tai 188bet  reason  is  that they are  coefficients  of  pre-truncated  distribution  of inefficiency uEit which has truncated distribution,  so  that they could not explain tai 188bet real effect of exogenous variables on uEit. In order to understand tai 188bet real impacts   of explanatory factors on energy inefficiency, this article calculates tai 188bet partial effect (or marginal effect) of each factor via  . tai 188bet formula and tai 188bet command in Stata to compute tai 188bet marginal effect of kth factor zk evaluated  at  sample  mean   ) is provided by Kumbhakar, Wang, and Horncastle [11]. Those results are shown in Table 4.

Table 2. Descriptive statistics for tai 188bet variables

Note: *: significant at level of 0.05; **: significant at level of 0.01; ***: significant at level of 0.001

Table 3. Results of estimation

Table 4. Avezrage partial effect of exogen6ous v(auriabl)e/s6on(z  )

5.    Discussion

    Impact of fuel types on energy inefficiency

tai 188bet coefficient of type on energy inefficiency is positive with significance level of 0.1%, implying higher inefficiency in tai 188bet tile enterprises using conventional fuels (e.g. coal, diesel) than in gas consuming enterprises.

More specifically, tai 188bet  results  in  Table  4  indicate that tai 188bet energy inefficient gap between firms using conventional fuels (e.g. coal, diesel) and  firms  using  gases is Thus,  we  can derive

This result shows that tai 188bet level of inefficiency in firms using conventional fuels is higher than that in firms using gases by 1.258 times. In other words, firms using gases are 1.258 times more energy efficient than other firms.

It is remarkable that tai 188bet emission of gas consumption is much lower  than  tai 188bet  emission  of  other  fuels. Figure 2 indicates that natural gas and LPG are tai 188bet fuels with   tai 188bet  least  CO2  emission  factor.  Natural  gas  and  LPG emit respectively 0.2kg and 0.23kg CO2 for each kWh (equivalent) consumed while other type of fuels, which are used in tai 188bet tile production, release from 0.27kg to 0.36kg CO2.

According to tai 188bet database, there are only 40 out   of 574 enterprises using LPG or NG in their production. Thus, if tai 188bet Vietnamese Government would like to achieve sustainable development goals, one thing that tai 188bet industry sector and tai 188bet tile industry, in particular, can help is to encourage as many firms to use environmentally friendly energy such as NG and LPG as possible.

Figure 2. CO2 emission by type of fuels (kgCO2/kWh) [13]

Of course, tai 188bet tile producing firms may be concerned about tai 188bet cost of technology conversion and tai 188bet fact that gas price is higher than tai 188bet price of conventional fuels. tai 188bet economic efficiency of technology conversion is not a scope of this article and should be considered carefully in another study. However, based on tai 188bet data of tai 188bet tile industry that is used in this article, tai 188bet average cost firms using gases need to pay for each million Btu energy consumption is about VND 0.412 million, while that number in firms using conventional fuels is VND 0.74 million. That comparison implies that using gases in production is considerably cheaper than using other fuels. It is also noteworthy that tai 188bet quality and tai 188bet productivity of tile production using gases are higher than those of production using conventional fuels. Therefore, a proportion (or all) of conversion cost and energy price difference may be absorbed by tai 188bet spread of products’ price.

    Impact of ownership structure on energy inefficiency

tai 188bet coefficients of dummy variable gov_sh are significantly positive, implying that state-related firms (gov_sh = 1) are more inefficient than non-state ones (gov_sh = 0).

From Table 4, we can derive tai 188bet ratio of input distance function between a state-related firm and a non-state firm
as        to prove that tai 188bet energy input distance of state-related firms is 1.313 times higher. It implies tai 188bet ratio of energy consumption to be reduced in state-related firms is 31.3% higher than that ratio in non-state firms. Therefore, in order to increase energy efficiency, tai 188bet tile industry may think about reducing tai 188bet number of state-related firms by equitisation or privatisation.

    Impact of enterprise size on energy inefficiency

tai 188bet results from Table 3 show that enterprise size has significantly negative impact on energy inefficiency in Vietnam.   More specifically, from Table  4 we can evaluate tai 188bet  ratio….   It   means tai 188bet proportion of energy consumption which needs to be cut-off in SMEs is lower than that in large firms by 35.4%.

That result is contrary to circumstances in many other countries where large firms have an advantage of scale   to be more efficient than tai 188bet others. tai 188bet reason may be (i) many of tai 188bet Vietnamese large companies have many employees but not all of them are productive (tobe discussed below), or (ii) many big companies having huge capital are state-related companies (as discussed above), or (iii) tai 188bet quality of management. tai 188bet sources of inefficiency vary from case to case so it is not possible to propose a comprehensive solution for all.

    Impact of labour quality on energy inefficiency

tai 188bet results in Table 3 indicate that labour quality has  a negative impact on inefficiency. Firms that have higher quality of labour, which was implied by higher average salary, have lower level of inefficiency. In addition, Table   4 shows that for firms having  higher  salary  (e.g.  10%) will have lower tai 188bet proportion of energy that needs to decrease (e.g. 2.184%).

In order to improve energy efficiency in tai 188bet Vietnamese tile industry, firms should consider improving their labour quality, especially with focus on improving tai 188bet quality of current employees.

    Impact of energy price on energy inefficiency

tai 188bet variable lp, as show in Table 3, has a negative effect on energy inefficiency. However, according to tai 188bet marginal impacts recorded in Table 4, that effect is pretty small. In detail, in response to 10% increase in energy price, tai 188bet energy input distance (or tai 188bet proportion of consumed energy needed to reduce) decreases only 0.566%.

This phenomenon is actually not something unexpected. It is remarkable that tai 188bet Vietnamese energy market is not competitive, so that tai 188bet difference in  energy prices here is caused by 2 main factors. Firstly, big contracts made by large firms will have more discounts   so that tai 188bet average cost will be lower than that in smaller firms. Secondly, firms using conventional fuels (e.g. coal, diesel…) have smaller average cost than firms using eco- friendly fuels such as natural gas and LPG. Because tai 188bet impacts of tai 188bet firm size and tai 188bet use of conventional fuels are already captured in tai 188bet model, tai 188bet impact of price on energy inefficiency is attenuated.

Nevertheless, energy price is still important and should be considered in tai 188bet inefficiency effects equation because when tai 188bet Vietnamese energy market becomes more competitive, lp will show more obvious impact on energy efficiency/inefficiency.

    Impact of import activities on energy inefficiency

Partial  effect  of  variable  im  is  considerably  small  in Table 4. Besides, tai 188bet t ratio of that factor reported in Table 3 implies it is not really significant (only significant at level of 27%). However, since most of materials for tai 188bet tile industry can be supplied by tai 188bet domestic market, not many companies have import activities. tai 188bet descriptive statistic in Table 5 displays that only 116 out of 1,722 observations have value of im equal to 1 (i.e. firm has import activities). Thus, tai 188bet significance level of 27% and tai 188bet appropriate sign of coefficient (negative sign) are noticeable results to convince we should not drop it out of tai 188bet model.

Table 5. Statistical summary of variables for import activities

It is possible to claim that import activities have a negative impact on tai 188bet energy inefficiency. Therefore, in order to improve energy efficiency, tai 188bet Vietnamese tile industry may encourage firms to be more dynamic in tai 188bet import-export market.

6.    Conclusion

This article implements stochastic  frontier  analysis  to evaluate energy technical inefficiency for firm-level panel data of tai 188bet Vietnamese tile industry  and  tai 188bet factors affecting that inefficiency follows tai 188bet procedure   of Battese and Coelli [10]. tai 188bet empirical results figure out tai 188bet significant impacts of exogenous factors on energy inefficiency, including fuel types, ownership structure, enterprise size, labour quality, energy price and import activities. These  findings  can  help  tai 188bet  Government  have better evidences for considering tai 188bet strategies to achieve tai 188bet goals of sustainable development. Therein, tai 188bet Government may think about  some  solutions, such as fuel conversion, equitisation or privatisation of state- related companies, and improving tai 188bet quality of tai 188bet labour force.

Concerning tai 188bet influence of fuel types on energy efficiency, this article discovers tai 188bet difference between firms consuming gases in production and firms using other fuels. More specifically, although there are only 40 out of 574 companies in tai 188bet tile industry that utilise gases, tai 188bet energy efficiency of these firms is 1.258 times better than that of tai 188bet remaining firms. A comparison of energy costs shows that gas consumers actually need to pay only VND 0.412 million/million Btu energy on average, while consumers of other fuels have to pay almost double that amount (VND 0.74 million/million Btu on average). Thus, although there may be restrictions about conversion cost, tai 188bet Vietnamese tile industry should be encouraged to convert to using  environmentally  friendly  energy  to achieve energy efficiency, less emission and higher productivity.

This article has some important contributions for stochastic frontier analysis in tai 188bet energy sector, as well as for researches on energy inefficiency in Vietnam. However, certain restrictions still exist in this article. For example, tai 188bet scope of time in 3 years is relatively short, or tai 188bet study does not cover some new issues in tai 188bet SFA such as scaling property of dataset. In addition, there are some potential for further studies as discussed below.

Firstly, this article uses input distance function for energy inefficiency with firm-level data. There are several researches applying tai 188bet same procedure for province- level data. Thus, other authors in tai 188bet Vietnamese energy market can conduct studies with province-level data, because energy efficiency analysis is still really new in Vietnam.
Secondly, there is a newer model proposed by Green [14, 15] which is more flexible than Battese and  Coelli [10], but it requires a panel data set for at least 10 years. With current statistic data, it is impossible to satisfy that condition. However, in tai 188bet next few years there will be no more constraints and that will be an opportunity to apply that more advanced model.

Furthermore, this article focuses on tai 188bet tile industry due to tai 188bet limitation in statistic data of other industries such as steel industry, cement industry. When longer panel datasets become available, it is possible to conduct studies on those fields and people will have a comprehensive view about energy inefficiency throughout tai 188bet industrial sector.

Acknowledgements

tai 188bet author would like to thank Professor Chun- Hung Kuo in tai 188bet International University of Japan for his continuous support in conducting this research. This work was supported by tai 188bet Japanese International Cooperation Centre (JICE).

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