Energy Crisis, Firm Productivity, Political Crisis, and Sustainable Growth of the Textile Industry: An Emerging Economy Perspective

Rizwana Yasmeen, Wasi Ul Hassan Shah, Larisa Ivascu (), Rui Tao and Muddassar Sarfraz
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Rizwana Yasmeen: School of Economics and Management, Panzhihua University, Panzhihua 617000, China
Wasi Ul Hassan Shah: School of Management, Zhejiang Shuren University, Hangzhou 310015, China
Larisa Ivascu: Faculty of Management in Production and Transportation, Politehnica University of Timisoara, 300191 Timisoara, Romania
Rui Tao: School of Economics and Management, Panzhihua University, Panzhihua 617000, China

Sustainability, 2022, vol. 14, issue 22, 1-17

Abstract: Pakistan’s textile industry is suffering from an electricity shortage and political turmoil. Due to a state of instability in which nothing is certain, things cannot be brought into balance by the state. Therefore, we employ firm-level data (101) to investigate the impact of expected and unexpected power outages on textile firm productivity throughout 2014 to 2019. The study assesses the importance of political stability for the flourishing of Pakistan’s textile sector. Outages were found to significantly negatively impact textile sector sales revenue, likely leading to lower results (by 0.240% and 0.0569%). The duration and frequency of outages had significant adverse influences on reducing firm revenue. It has been estimated that a 1 h outage will cause to loss of revenue of approximately 24 percent. Comparatively, load-shedding hours had a smaller impact on lowering firms’ sales revenues, which were 5% to 8% with and without political stability inclusion. Further, outage hours decreased the export of textiles by 0.286%. The magnitude of export reduction by outages and load shedding was higher. The driving impact of political stability was higher than the impacts of expected and unexpected shortages. A stable political system is necessary to develop feasible solutions.

Keywords: power shortage; expected and unexpected power outages; political instability; Pakistan; textiles firms; economic sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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