Policy document
June 27th 2023

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

Flag of IGO IGO
World Bank
World Bank
https://openknowledge.worldbank.org Flag of igo IGO

The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. It was created at the 1944 Bretton Woods Conference, along with the International Monetary Fund (IMF), and both are based in Washington, D.C.
DEC-Sustainability & Infrastruct (DECSI), Apeti, Ablam Estel and Ly, Alpha
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...

Hello! You're looking at a policy document report on Overton

We track government policy, guidelines, think tank research, working papers and more to help our customers see the impact and influence of their work. Are you interested in seeing what information we have to offer?

If you fund, produce or manage research or work to influence policy, we'd love to talk.

Request a free trial Learn more

Language: eng
40 pages

Download PDF

Identifiers

Overton ID
worldbank-3e259f703a580fab157a005a1db6e6ae
doi
10.1596/1813-9450-10510
handle
10986/40015

Topics in this document

Gross domestic product Regression analysis Productivity Ordinary least squares Economic growth Fixed effects model Dependent and independent variables Logarithm Errors and residuals Inflation Infrastructure Confounding Labour economics Developing country Economics Profit (economics) Sample mean and covariance Market (economics) Aid Output (economics) Economy Multicollinearity Bank Robust statistics Linear least squares Endogeneity (econometrics) Entropy Official development assistance Cobb–Douglas production function Weighted least squares

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

Related COFOG Divisions

4: Economic Affairs 4.4: Mining, Manufacturing, and Construction

Cites research funded by

United Nations University World Institute for Development Economics Research 1 United Nations University 1 Università degli Studi di Milano 2 University of Birmingham 1 ANR (Special project, May 2022) 1 Agence Nationale de la Recherche 2 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 1

Citations

Cited by 1 other policy document (0 of them are from other policy sources)

Recognized names mentioned in this document

Overton only tracks names from certain institutions. Names must have been cited in at least one policy document and their corresponding affiliation has to be found nearby - you can find more details on the help page.

Jean-Louis Combes at University of Clermont Auvergne
This name and affiliation were mentioned in this document.
On page 3 (or quick view this section)
Anna Creti at Paris Dauphine University
This name and affiliation were mentioned in this document.
On page 3 (or quick view this section)