Energy endowments and the location of manufacturing firms

Edward Manderson, Richard Kneller

Research output: Contribution to journalArticlepeer-review

124 Downloads (Pure)


This paper provides empirical evidence on whether individual firms choose to structure their production globally to exploit international differences in energy resources and prices. We use the US shale gas revolution as a quasi-natural experiment to analyse two extensive margins of adjustment by heterogeneous UK firms. First, we consider whether energy intensive UK firms have established new affiliates in the US in response to the shale gas shock. Second, we explore within-firm plant-level adjustments to consider whether the energy price gap increases the propensity for firms that have US operations to shut down their energy intensive UK plants. We find evidence in support of these two margins of adjustment. Taken together, these results suggest that multinational firms have relocated energy intensive production from the UK to the US due to the endowment-driven energy price gap.
Original languageEnglish
Article number102301
JournalJournal of Environmental Economics and Management
Publication statusPublished - 1 Feb 2020


  • Energy endowments
  • FDI
  • Heterogeneous firms
  • Plant location

Research Beacons, Institutes and Platforms

  • Manchester Environmental Research Institute


Dive into the research topics of 'Energy endowments and the location of manufacturing firms'. Together they form a unique fingerprint.

Cite this