This study aims to explore the relationship between energy management practices – specifically energy consumption targets, energy efficiency improvement measures and energy consumption monitoring – and firm performance in the developing economies of Egypt and Tunisia. It seeks to determine how these practices impact total sales performance, providing insights for regional firms and policymakers.
This study uses data from the World Bank’s 2020 Enterprise Survey, focusing on firms in Egypt and Tunisia. This study uses partial least squares structural equation modeling to analyze the impact of energy management practices on total sales performance.
The findings reveal that, while energy consumption targets do not directly affect total sales performance in Tunisia, they significantly enhance energy efficiency improvement measures and energy consumption monitoring, indirectly influencing total sales performance. This finding highlights the critical role of comprehensive energy management strategies in improving firm performance.
This study is limited to firms in Egypt and Tunisia, with cross-sectional data that do not capture the dynamic interactions of the variables over time. Future research should consider longitudinal data and expand this study to other developing economies. Using single-item measures for each variable suggests that more nuanced, multi-item measures could offer more profound insights.
For firms in Egypt and Tunisia, adopting comprehensive energy management practices, such as setting energy consumption targets, implementing energy efficiency measures and monitoring energy consumption, can lead to better sales performance by reducing energy costs, which can be reinvested in core business activities. Policymakers should support these practices through incentives and policies that promote energy efficiency and sustainability.
This study contributes to the literature by offering empirical evidence of the indirect impact of energy consumption targets on firm performance in developing economies. This underscores the importance of integrated energy management strategies to achieve the United Nations Sustainable Development Goals (SDGs), mainly SDG 7 (Affordable and Clean Energy) and SDG 12 (Responsible Consumption and Production), providing valuable insights for both policymakers and practitioners.
