2017
DOI: 10.1017/age.2016.38
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You Can't Count on Me: The Impact of Electricity Unreliability on Productivity

Abstract: While access to reliable electricity can significantly constrain industrial production, little is known as to how unreliability impacts firm level productivity. This is a particularly salient issue for firms in developing countries, where electricity provision is still unreliable and self-generation is costly. This paper analyzes the impact of electricity provision on productivity, instrumenting for electricity demand with district level solar irradiance. Results indicate that firms exhibit decreasing producti… Show more

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Cited by 9 publications
(6 citation statements)
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“…Indeed, firm size is an important factor in determining the ability to cope with outages as confirmed for a set of Indonesian manufacturing firms (Poczter, 2017). In their sample, the negative effect of electricity unreliability on firm productivity is more than 50% larger for smaller than for bigger firms.…”
Section: More Reliable Electricity Supply Can Increase Output and Promentioning
confidence: 89%
“…Indeed, firm size is an important factor in determining the ability to cope with outages as confirmed for a set of Indonesian manufacturing firms (Poczter, 2017). In their sample, the negative effect of electricity unreliability on firm productivity is more than 50% larger for smaller than for bigger firms.…”
Section: More Reliable Electricity Supply Can Increase Output and Promentioning
confidence: 89%
“…Focusing on the electricity sector makes an interesting case since research on industry and country level in Africa shows huge consequences as a result of interrupted electricity network: As the occurrence of power outages increases by 1%, the output of a firm is estimated to reduce by 3.3% in a short run, and the gross domestic product (GDP) per capita reduces by 2.9% in the long run (Andersen and Dalgaard, 2013;Mensah, 2018). The disruption of services, such as electricity, and water, heavily impacts small firms with a low ability to cope, and this limits entrepreneurship and competition (Alby et al, 2013;Poczter, 2017). Moreover, defective utility infrastructure reduces the number of industries hosted by a country and hence weakens its attractiveness to international investors (World Bank, 2019).…”
Section: Methods Materials and The Rationalementioning
confidence: 99%
“…Productivity drops even when firms can smooth electricity supply through self-generation. For instance, scheduled blackouts reduce firms' productivity by forcing them to shift resources away from productivity-enhancing activities (Poczter 2017;Reinikka and Svensson 2002).…”
Section: Energy Sectormentioning
confidence: 99%