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The Effects of Power Outages on the Performance of Manufacturing Firms in the MENA Region

Ali Fakih (), Ghazzawi Nancy () and Pascal Ghazalian
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Ghazzawi Nancy: Department of Economics, Lebanese American University, Beirut, Lebanon

Review of Middle East Economics and Finance, 2020, vol. 16, issue 3, 28

Abstract: Power supply in developing countries is often characterized by unreliability and inefficiency, resulting in disruption costs for operating firms. The extents of power outages in the Middle East and North Africa (MENA) region are more significant compared to other geo-economic regions. This paper examines the effects of power outages on the performance of manufacturing firms in the MENA region using a firm-level dataset derived from the World Bank’s Enterprise Surveys (WBES) database. Firm performance is represented by sales, employment, and productivity growth rates. The extents of power outages are depicted by objective measures characterizing durations and frequencies of power outages, and by perception-based measures reflecting firms’ perceived severity of power outages. The results emphasize the adverse consequences of power outages for the performance of manufacturing firms in the MENA region. They also suggest that different patterns of power outages have varying implications for firm performance, and that the effects of power outages exhibit variations with firm size.

Keywords: firm performance; firm productivity; MENA region; power outages; power supply (search for similar items in EconPapers)
JEL-codes: D22 D24 L94 Q49 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1515/rmeef-2020-0011

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