Advanced Search
MyIDEAS: Login to save this paper or follow this series

Firms operating under infrastructure and credit constraints in developing countries : the case of power generators

Contents:

Author Info

  • Alby, Philippe
  • Dethier, Jean-Jacques
  • Straub, Stephane

Abstract

Many developing countries are unable to provide their industrial sector with reliable power and many enterprises have to contend with electricity that is insufficient and of poor quality. Because of these constraints, firms in developing countries opt for self-generation even though it is widely considered a second best solution. This paper develops a theoretical model of investment behavior in remedial infrastructure when physical and credit constraints are present. It then tests econometrically some implications from this model using a large sample of enterprises from 87 countries from the World Bank Enterprise Survey Database. After showing that these constraints interact and have non-linear effects depending on the industrial sector's degree of reliance on electricity and size of firms, the paper draws differentiated policy recommendations. Credit constraints appear to be the priority in sectors very reliant on electricity to spur entry and convergence to the technological frontier, while in other sectors, firms would benefit more widely from marginal improvements in electrical supply.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2010/12/08/000158349_20101208091027/Rendered/PDF/WPS5497.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5497.

as in new window
Length:
Date of creation: 01 Dec 2010
Date of revision:
Handle: RePEc:wbk:wbrwps:5497

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

Keywords: Energy Production and Transportation; Microfinance; Climate Change Mitigation and Green House Gases; Private Participation in Infrastructure; Access to Finance;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Foster, Vivien & Steinbuks, Jevgenijs, 2009. "Paying the price for unreliable power supplies : in-house generation of electricity by firms in Africa," Policy Research Working Paper Series 4913, The World Bank.
  2. Kyu Sik Lee & Anas, Alex & Gi-Taik Oh, 1996. "Costs of infrastructure deficiencies in manufacturing in Indonesia, Nigeria, and Thailand," Policy Research Working Paper Series 1604, The World Bank.
  3. Taryn Dinkelman, 2011. "The Effects of Rural Electrification on Employment: New Evidence from South Africa," American Economic Review, American Economic Association, American Economic Association, vol. 101(7), pages 3078-3108, December.
  4. Stephane Straub, 2004. "Informal Sector: The Credit Market Channel," ESE Discussion Papers, Edinburgh School of Economics, University of Edinburgh 101, Edinburgh School of Economics, University of Edinburgh.
  5. Barham, Tania & Lipscomb, Molly & Mobarak, Ahmed Mushfiq, 2011. "Development Effects of Electrification: Evidence from the Geologic Placement of Hydropower Plants in Brazil," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8427, C.E.P.R. Discussion Papers.
  6. Jean-Jacques Dethier & Maximilian Hirn & Stéphane Straub, 2011. "Explaining Enterprise Performance in Developing Countries with Business Climate Survey Data," World Bank Research Observer, World Bank Group, World Bank Group, vol. 26(2), pages 258-309, August.
  7. Bartelsman, Eric & Haltiwanger, John C. & Scarpetta, Stefano, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," IZA Discussion Papers 1374, Institute for the Study of Labor (IZA).
  8. Reinikka, Ritva & Svensson, Jakob, 2002. "Coping with poor public capital," Journal of Development Economics, Elsevier, Elsevier, vol. 69(1), pages 51-69, October.
  9. Dollar, David & Hallward-Driemeier, Mary & Mengistae, Taye, 2005. "Investment Climate and Firm Performance in Developing Economies," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 1-31, October.
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 in new window

Cited by:
  1. Alby, Philippe & Dethier, Jean-Jacques & Straub, Stéphane, 2011. "Let there be Light! Firms Operating under Electricity Constraints in Developing Countries," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 686, Institut d'Économie Industrielle (IDEI), Toulouse.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:5497. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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