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The Productivity Cost of Power Outages for Manufacturing Small and Medium Enterprises in Senegal

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  • Lassana Cissokho

    (Faculté des Sciences Economiques et de Gestion, Université Cheikh Anta Diop, Senegal)

Abstract

This paper investigates the productivity effects of power outages on manufacturing SMEs in Senegal, using a panel data on manufacturing firms. Productivity is estimated using stochastic frontier models, and power outages measured by their frequency or their duration. We controlled for firms owning a generator as well. The main results are drawn from random effects in a linear panel model. Nonetheless, the results remain consistent to the robustness checks using different models: a double-sided truncated data model and a generalized linear model, and different productivity measures: data envelopment analysis. We find that power outages have negative significant effects on the productivity of SMEs. For example, the manufacturing sector lost up to around 11.6% of the actual productivity due to power outages in 2011, and small firms appear to be affected more than medium ones, 5% against 4.3%. Further, firms with a generator were successful in countering the adverse effect of power outages on productivity. Besides, another outstanding result is the significant positive effect of access to credit on productivity. At last, it appears that productivity increases with firms’ size.

Suggested Citation

  • Lassana Cissokho, 2020. "The Productivity Cost of Power Outages for Manufacturing Small and Medium Enterprises in Senegal," Working Papers 397, African Economic Research Consortium, Research Department.
    • Handle: RePEc:aer:wpaper:397
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    Cited by:

    1. Dorothee Apfel & Carsten Herbes, 2021. "What Drives Senegalese SMEs to Adopt Renewable Energy Technologies? Applying an Extended UTAUT2 Model to a Developing Economy," Sustainability, MDPI, vol. 13(16), pages 1-21, August.

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