IDEAS home Printed from https://ideas.repec.org/p/fae/wpaper/2016.20.html
   My bibliography  Save this paper

Bring Back Our Light: Power Outages and Industrial Performance in Sub-Saharan Africa

Author

Listed:
  • Justice Tei Mensah

    (Swedish University of Agricultural Sciences)

Abstract

Power cuts have become a characteristic feature of many Sub-Saharan African economies. This paper attempts to investigate the micro and macro impacts of power outages by estimating the effects on firm revenue and productivity, and output growth of the manufacturing and industrial sectors. Further, I evaluate the impact of self-generation in ameliorating the effects of electricity shortages on firm performance using a quasi-experimental approach. Results from the analysis reveal significant negative effects of electricity shortages on firm revenue and productivity, and output growth of manufacturing and industrial sectors. Finally, contrary to the notion that self-generation may be helpful to firms during outage periods, evidence from this paper suggest the reliance on self-generation is associated with productivity losses albeit short run revenue gains.

Suggested Citation

  • Justice Tei Mensah, 2016. "Bring Back Our Light: Power Outages and Industrial Performance in Sub-Saharan Africa," Working Papers 2016.20, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2016.20
    as

    Download full text from publisher

    File URL: http://faere.fr/pub/WorkingPapers/Mensah_FAERE_WP2016.20.pdf
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eifert, Benn & Gelb, Alan & Ramachandran, Vijaya, 2008. "The Cost of Doing Business in Africa: Evidence from Enterprise Survey Data," World Development, Elsevier, vol. 36(9), pages 1531-1546, September.
    2. Nicholas Bloom & Benn Eifert & Aprajit Mahajan & David McKenzie & John Roberts, 2013. "Does Management Matter? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 1-51.
    3. Taryn Dinkelman, 2011. "The Effects of Rural Electrification on Employment: New Evidence from South Africa," American Economic Review, American Economic Association, vol. 101(7), pages 3078-3108, December.
    4. Fisher-Vanden, Karen & Mansur, Erin T. & Wang, Qiong (Juliana), 2015. "Electricity shortages and firm productivity: Evidence from China's industrial firms," Journal of Development Economics, Elsevier, vol. 114(C), pages 172-188.
    5. Philippe Alby & Jean-Jacques Dethier & Stéphane Straub, 2013. "Firms Operating under Electricity Constraints in Developing Countries," The World Bank Economic Review, World Bank, vol. 27(1), pages 109-132.
    6. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LP, vol. 4(2), pages 113-123, June.
    7. Steinbuks, J. & Foster, V., 2010. "When do firms generate? Evidence on in-house electricity supply in Africa," Energy Economics, Elsevier, vol. 32(3), pages 505-514, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92089, University Library of Munich, Germany, revised 03 Feb 2019.
    2. Christopher Ksoll & Kristine Bos & Sarah Hughes & Anthony Harris & Arif Mamun, "undated". "Evaluation Design Report for the Benin Power Compact's Electricity Generation Project and Electricity Distribution Project," Mathematica Policy Research Reports 9f8974513ee745aaac3b5c62e, Mathematica Policy Research.
    3. Rabia Asif & Muhammad Fiaz & Zunaina Zulfiqar, 2022. "The Impact of Sustainable Energy on Liquidity and Financial Performance of the Textile Industry," SAGE Open, , vol. 12(4), pages 21582440221, December.
    4. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92091, University Library of Munich, Germany, revised 04 Feb 2019.
    5. Imandojemu Kingsley & Joseph E. Tonuchi, 2021. "Contribution to the Empirics of Electricity Blackouts and Productivity in Nigeria," Energy Economics Letters, Asian Economic and Social Society, vol. 8(1), pages 60-69, June.
    6. Cyprian Amutabi & Anthony Wambugu, 2020. "Determinants of labor productivity among SMEs and large‐sized private service firms in Kenya," African Development Review, African Development Bank, vol. 32(4), pages 591-604, December.
    7. Elliott, Robert J.R. & Nguyen-Tien, Viet & Strobl, Eric A., 2021. "Power outages and firm performance: A hydro-IV approach for a single electricity grid," Energy Economics, Elsevier, vol. 103(C).
    8. Duncan Chaplin & Delia Welsh & Arif Mamun & Nick Ingwersen & Kristine Bos & Erin Crossett & Poonam Ravindranath & Dara Bernstein & William Derbyshire, "undated". "Ghana Power Compact: Evaluation Design Report," Mathematica Policy Research Reports 8c1896c6f9af45f08347287c1, Mathematica Policy Research.
    9. Boyan Zhang & Mingming Wang, 2021. "How Will the Improvements of Electricity Supply Quality in Poor Regions Reduce the Regional Economic Gaps? A Case Study of China," Energies, MDPI, vol. 14(12), pages 1-18, June.
    10. Chapel, Capucine, 2022. "Impact of official development assistance projects for renewable energy on electrification in sub-Saharan Africa," World Development, Elsevier, vol. 152(C).
    11. Florian Morvillier, 2020. "Infrastructures and the real exchange rate," EconomiX Working Papers 2020-26, University of Paris Nanterre, EconomiX.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mensah, Justice Tei, 2016. "Bring Back our Light: Power Outages and Industrial Performance in Sub-Saharan Africa," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236587, Agricultural and Applied Economics Association.
    2. Cole, Matthew A. & Elliott, Robert J.R. & Occhiali, Giovanni & Strobl, Eric, 2018. "Power outages and firm performance in Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 134(C), pages 150-159.
    3. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92091, University Library of Munich, Germany, revised 04 Feb 2019.
    4. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92089, University Library of Munich, Germany, revised 03 Feb 2019.
    5. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2016. "How Do Electricity Shortages Affect Industry? Evidence from India," American Economic Review, American Economic Association, vol. 106(3), pages 587-624, March.
    6. Abiodun, Kehinde & Gilbert, Ben, 2022. "Does universal electrification shield firms from productivity loss?," World Development Perspectives, Elsevier, vol. 28(C).
    7. Stephen O'Connell & Allan Collard-Wexler & Hunt Allcott, 2015. "How Do Electricity Shortages A\00ffect Production? Evidence from India," 2015 Meeting Papers 159, Society for Economic Dynamics.
    8. Stephie Fried & David Lagakos, 2020. "Electricity and Firm Productivity: A General-Equilibrium Approach," NBER Working Papers 27081, National Bureau of Economic Research, Inc.
    9. Yu, Jian & Liu, Peng & Fu, Dahai & Shi, Xunpeng, 2023. "How do power shortages affect CO2 emission intensity? Firm-level evidence from China," Energy, Elsevier, vol. 282(C).
    10. Meeks, Robyn C. & Omuraliev, Arstan & Isaev, Ruslan & Wang, Zhenxuan, 2023. "Impacts of electricity quality improvements: Experimental evidence on infrastructure investments," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    11. Mertzanis, Charilaos, 2018. "Institutions, development and energy constraints," Energy, Elsevier, vol. 142(C), pages 962-982.
    12. Oseni, Musiliu O. & Pollitt, Michael G., 2015. "A firm-level analysis of outage loss differentials and self-generation: Evidence from African business enterprises," Energy Economics, Elsevier, vol. 52(PB), pages 277-286.
    13. Kenneth Lee & Edward Miguel & Catherine Wolfram, 2020. "Does Household Electrification Supercharge Economic Development?," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 122-144, Winter.
    14. Perez Sebastian,Fidel & Steinbuks,Jevgenijs & Feres,Jose Gustavo & Trotter,Ian Michael, 2020. "Electricity Access and Structural Transformation : Evidence from Brazil's Electrification," Policy Research Working Paper Series 9182, The World Bank.
    15. Mohammad Abir Shahid Chowdhury & Shuai Chuanmin & Marcela Sokolová & ABM Munibur Rahman & Ahsan Akbar & Zahid Ali & Muhammad Usman, 2021. "Unveiling the Nexus between Access to Electricity, Firm Size and SME’s Performance in Bangladesh: New Evidence Using PSM," Energies, MDPI, vol. 14(20), pages 1-16, October.
    16. Cotter, Christopher & Rousseau, Peter L. & Vu, Nam T., 2021. "Electrification, telecommunications, and the finance-growth nexus: Evidence from firm-level data," Energy Economics, Elsevier, vol. 94(C).
    17. World Bank Group, "undated". "Africa's Pulse, No. 17, April 2018," World Bank Publications - Reports 29667, The World Bank Group.
    18. Kennedy, Ryan & Mahajan, Aseem & Urpelainen, Johannes, 2019. "Quality of service predicts willingness to pay for household electricity connections in rural India," Energy Policy, Elsevier, vol. 129(C), pages 319-326.
    19. Chapel, Capucine, 2022. "Impact of official development assistance projects for renewable energy on electrification in sub-Saharan Africa," World Development, Elsevier, vol. 152(C).
    20. Steinbuks Jevgenijs, 2012. "Firms' Investment under Financial and Infrastructure Constraints: Evidence from In-House Generation in Sub-Saharan Africa," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-34, October.

    More about this item

    Keywords

    Power Outages; Sub-Saharan Africa; Electricity; Productivity; Firms;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fae:wpaper:2016.20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dorothée Charlier (email available below). General contact details of provider: https://edirc.repec.org/data/faereea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.