Power outages and firm performance in Sub-Saharan Africa

Cole, Matthew A.; Elliott, Robert J.R.; Occhiali, Giovanni; Strobl, Eric Albert (2018). Power outages and firm performance in Sub-Saharan Africa. Journal of development economics, 134, pp. 150-159. Elsevier 10.1016/j.jdeveco.2018.05.003

[img] Text
1-s2.0-S0304387818305054-main.pdf - Published Version
Restricted to registered users only
Available under License Publisher holds Copyright.

Download (527kB) | Request a copy

In this paper we assess the extent to which power outages affect the sales of firms across different African economies. We address the potential endogeneity concerns endemic in much of the existing literature by constructing an instrument for power outages based on the varying share of electricity produced by hydro-power as a result of variation in the local climate conditions. Using firm-level data for 14 countries from the World Bank Enterprise Surveys, we find evidence of a negative relationship between an unreliable electricity supply and firms’ sales, with a stronger effect for firms that do not own a generator. We find that reducing average outage levels to those of South Africa would increase overall sales of firms in Sub-Saharan Africa by 85.1%, rising to 117.4% for firms without a generator.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Strobl, Eric Albert

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0304-3878

Publisher:

Elsevier

Language:

English

Submitter:

Dino Collalti

Date Deposited:

24 Jun 2019 18:32

Last Modified:

12 Nov 2019 15:49

Publisher DOI:

10.1016/j.jdeveco.2018.05.003

BORIS DOI:

10.7892/boris.127585

URI:

https://boris.unibe.ch/id/eprint/127585

Actions (login required)

Edit item Edit item
Provide Feedback