Panel Technical Efficiency of Korean Companies in the Energy Sector based on Digital Capabilities

Abstract

Digitalization is a crucial driver of enhanced energy system efficiency, facilitating the energy transition and offering a gateway for technology companies to enter the sector. This study, employing stochastic frontier analysis as the chosen methodology, investigates the efficiency challenges faced by companies venturing into the energy industry with a digital technology focus. Our empirical analysis reveals a positive correlation between higher total assets and increased research and development expenditures, signifying the vital importance of talent acquisition and securing R&D funding. Additionally, it is noteworthy that smaller companies experienced a more pronounced negative impact of COVID-19 on their efficiency. These findings contribute to refining digitalization strategies in the energy industry, emphasizing the role of efficiency from a corporate perspective.