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Lights Off, Lights On : The Effects of Electricity Shortages on Small Firms


  • Hardy,Morgan L.
  • Mccasland,Jamie Lee


Entrepreneurs in developing countries report that unreliable electricity imposes a serious constraint, yet little evidence exists on how blackouts impact the micro firms that account for the majority of employment. This paper estimates the effects of outages on small firms using original firm-level panel data and finds evidence of differential effects by firm size. Firms without employees experience large reductions in revenues and profits. Outages have no measurable effect on the output of firms with employees, where worker hours increase, weekly wages paid decrease, and the analysis fails to reject that blackouts have no effect on (average firm-level) worker hourly wages.

Suggested Citation

  • Hardy,Morgan L. & Mccasland,Jamie Lee, 2019. "Lights Off, Lights On : The Effects of Electricity Shortages on Small Firms," Policy Research Working Paper Series 9093, The World Bank.
  • Handle: RePEc:wbk:wbrwps:9093

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    Cited by:

    1. Stephie Fried & David Lagakos, 2020. "Electricity and Firm Productivity: A General-Equilibrium Approach," NBER Working Papers 27081, National Bureau of Economic Research, Inc.
    2. Rizwana Yasmeen & Wasi Ul Hassan Shah & Larisa Ivascu & Rui Tao & Muddassar Sarfraz, 2022. "Energy Crisis, Firm Productivity, Political Crisis, and Sustainable Growth of the Textile Industry: An Emerging Economy Perspective," Sustainability, MDPI, vol. 14(22), pages 1-17, November.
    3. Fox,Louise & Kaul,Upaasna, 2018. "The evidence is in : how should youth employment programs in low-income countries be designed ?," Policy Research Working Paper Series 8500, The World Bank.
    4. Deutschmann, Joshua W. & Postepska, Agnieszka & Sarr, Leopold, 2021. "Measuring willingness to pay for reliable electricity: Evidence from Senegal," World Development, Elsevier, vol. 138(C).
    5. Hardy, Morgan & McCasland, Jamie, 2021. "It takes two: Experimental evidence on the determinants of technology diffusion," Journal of Development Economics, Elsevier, vol. 149(C).

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