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The Policy Research Working Paper 10436 examines the effects of energy prices on the competitiveness of manufacturing firms in Chile. The paper finds that while increases in energy prices generally do not hurt firm competitiveness, the impact depends on the fuel type. Electricity price increases are negatively correlated with firm outcomes, while fossil fuel price increases have a positive association with investment and firm productivity. These effects are heterogeneous and vary by firm attributes such as size, ownership, and location. Overall, the paper suggests that energy prices have a significant impact on the competitiveness of manufacturing firms in Chile.
