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The Determinants of Electricity Constraints by Firms in Developing Countries

Author

Listed:
  • Elizabeth Asiedu

    (Department of Economics, University of Kansas)

  • Theophile T. Azomahou

    (African Economic Research Consortium)

  • Neepa B. Gaekwa

    (State University of New York at Fredonia)

  • Mahamady Ouedraogo

    (Universite Clermont-Auvergne, CNRS, CERDI)

Abstract
We employ survey data for 108 developing countries over the period 2006-2017 and estimate an ordered probit model to determine the firm and country characteristics that affect the probability that a firm is energy poor - i.e., the firm will report that electricity is an obstacle to the firm's operations. We find that firms that experienced power outages and firms in the manufacturing industry are more likely to be energy poor. In contrast, majority-owned government firms and older firms are less likely to be energy poor. The gender of the firm owner and the size of the firm are not correlated with firm energy poverty. Among firms that experienced power outages, firm energy poverty increases with the frequency as well as the duration of outages. We also find that firms that operate in countries with weak institutions and in countries where residents have limited access to electricity are more likely to be energy poor.

Suggested Citation

  • Elizabeth Asiedu & Theophile T. Azomahou & Neepa B. Gaekwa & Mahamady Ouedraogo, 2021. "The Determinants of Electricity Constraints by Firms in Developing Countries," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202116, University of Kansas, Department of Economics, revised Jun 2021.
    • Handle: RePEc:kan:wpaper:202116
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    File URL: http://www2.ku.edu/~kuwpaper/2021Papers/202116.pdf
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    References listed on IDEAS

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    Cited by:

    1. Guo, Dongmei & Li, Qin & Liu, Peng & Shi, Xunpeng & Yu, Jian, 2023. "Power shortage and firm performance: Evidence from a Chinese city power shortage index," Energy Economics, Elsevier, vol. 119(C).
    2. 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).

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    More about this item

    Keywords

    Constraints; Electricity; Energy Poverty; Firms; Institution;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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