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

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dc.contributor.authorApeti, Ablam Estel
dc.contributor.authorLy, Alpha
dc.date.accessioned2023-07-17T15:00:10Z
dc.date.available2023-07-17T15:00:10Z
dc.date.issued2023-07-17
dc.description.abstractThis 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 indicate that the effect of power outages on firm-level revenue-based total factor productivity could be influenced by the stage of economic development (low-income countries, lower-middle-income countries, upper-middle-income countries), and the ability of firms to engage in research and development and purchase backup generators. These findings suggest that to ensure economic development, the government should provide a stable power supply that can mitigate the negative shocks faced by manufacturing firms and enhance their productivity and competitiveness, allowing them to drive economic growth.en
dc.identifierhttp://documents.worldbank.org/curated/en/099703406272317386/IDU0431050dd0a9530424d0a8c80fd5ee66c49eb
dc.identifier.doi10.1596/1813-9450-10510
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/40015
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Papers; 10510
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectPOWER CONSTRAINTS
dc.subjectPRODUCTIVITY CONSTRAINT
dc.subjectWORLD BANK ENTERPRISE SURVEY DATA
dc.subjectCOMMERCIAL POWER OUTAGE IMPACT
dc.subjectELECTRICITY OUTAGES
dc.subjectPRODUCTIVITY AND INFRASTRUCTURE
dc.subjectPOWER GRID
dc.subjectPOWER AND ECONOMIC GROWTH
dc.titlePower Constraints and Firm-Level Total Factor Productivity in Developing Countriesen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titlePower Constraints and Firm-Level Total Factor Productivity in Developing Countries
okr.date.disclosure2023-06-27
okr.date.lastmodified2023-06-27T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099703406272317386/IDU0431050dd0a9530424d0a8c80fd5ee66c49eb
okr.guid099703406272317386
okr.identifier.docmidIDU-431050dd-a953-424d-a8c8-fd5ee66c49eb
okr.identifier.doi10.1596/1813-9450-10510
okr.identifier.doihttp://dx.doi.org/10.1596/1813-9450-10510
okr.identifier.doihttps://doi.org/10.1596/1813-9450-10510
okr.identifier.externaldocumentum34103231
okr.identifier.internaldocumentum34103231
okr.identifier.reportWPS10510
okr.import.id1119
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099703406272317386/pdf/IDU0431050dd0a9530424d0a8c80fd5ee66c49eb.pdfen
okr.topicEnergy::Electric Power
okr.topicInfrastructure Economics and Finance::Infrastructure Economics
okr.topicLaw and Development::Private Sector Development Law
okr.topicInfrastructure Economics and Finance::Private Participation in Infrastructure
okr.unitDEC-Sustainability & Infrastruct (DECSI)
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