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Identifiers

doi
10.1596/1813-9450-10510
handle
10986/40015

Power Constraints and Firm-Level Total Factor Productivity in Developing Countries

Flag for IGO World Bank on June 27th 2023
Apeti, Ablam Estel, Ly, Alpha and DEC-Sustainability & Infrastruct (DECSI)
This paper analyzes the effects of power outages and constraints on manufacturing firms’ revenue-based total factor productivity in developing countries. The empirical analysis is based on the World Bank Enterprise Survey datasets for 84 countries over 2006–2019. The paper starts by showing statistically that firms facing power outages differ and operate in very different environments compared to firms not facing power outages, underlining a potential nonrandom issue of the treatment variable. The matching-based approach (entropy balancing) is designed to contain this type of bias. It shows that power outages negatively and significantly affect firm-level revenue-based total factor productivity, with a 9 percent lower unconditional average productivity for exposed firms compared to nonexposed firms. Moreover, the estimates suggest a connection between the severity of self-reported power constraints or obstacles by firms and the magnitude of revenue-based total factor productivity loss. The results also...

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Related SDGs

SDG 9: Industry, Innovation and Infrastructure ...
SDG 9: Industry, Innovation and Infrastructure

Target 9.2

Promote inclusive and sustainable industrialization and significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries

Cites research funded by

1 United Nations University World Institute for Development Economics Research 1 United Nations University 2 Università degli Studi di Milano 1 University of Birmingham 1 ANR (Special project, May 2022) 2 Agence Nationale de la Recherche 1 National Natural Science Foundation of China 1 National Social Science Fund of China 1 Young Talents 1 Central University of Finance and Economics 1 111 Project 1 National High-tech Research and Development Program 1 National Office for Philosophy and Social Sciences 1 Higher Education Discipline Innovation Project 1 U.S. Department of Energy's Biological and Environmental Research Program 1 National Science Foundation 1 Biological and Environmental Research 1 Office of Science 1 U.S. Department of Energy 1 NSF (Special project, May 2022) 1 University of Milan 1 International Growth Centre

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Jean-Louis Combes at University of Clermont Auvergne
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Anna Creti at Paris Dauphine University
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