 Firm performance in sub-Saharan Africa: What role do electricity shortages play?Samuel Osei-Gyebi and John Bosco Dramani Cogent Economics & Finance, 2023, vol. 11, issue 2, 2251822 Abstract: Electricity outages affect the performance of firms in sub-Saharan Africa (SSA) through a reduction in production capacity and over-reliance on backup generators, which raises the cost of production and render them uncompetitive. Based on this, we estimated the joint effect of electricity outage frequency and duration of outages on the performance of firms in SSA through the method of instrumental variable (IV). Employing firm-level data from the World Bank Enterprise Survey for 28 SSA countries from 2007 to 2018, the study found a unit increase in outage frequency and its duration combine to reduce yearly sales of firms in SSA by $114.9. Also, the study revealed that small-size firms in SSA incur $408.894 losses relative to large firms for every joint increase in outage frequency and outage duration largely because they cannot cope with electricity outages. Since electricity shortages persist in SSA, mitigation policies must target small firms as they are the worst affected by electricity outages. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:oaefxx:v:11:y:2023:i:2:p:2251822 Ordering information: This journal article can be ordered from DOI: 10.1080/23322039.2023.2251822 Access Statistics for this article Cogent Economics & Finance is currently edited by Steve Cook, Caroline Elliott, David McMillan, Duncan Watson and Xibin Zhang More articles in Cogent Economics & Finance from Taylor & Francis Journals |
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