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The Determinants of Electricity Constraints by Firms in Developing Countries

Elizabeth Asiedu, Theophile Azomahou, Neepa Gaekwa and Mahamady Ouedraogo
Additional contact information
Theophile Azomahou: African Economic Research Consortium
Neepa Gaekwa: State University of New York at Fredonia
Mahamady Ouedraogo: Universite Clermont-Auvergne, CNRS, CERDI

No 202116, WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS from University of Kansas, Department of Economics

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.

Keywords: Constraints; Electricity; Energy Poverty; Firms; Institution (search for similar items in EconPapers)
JEL-codes: D22 L20 O12 (search for similar items in EconPapers)
Date: 2021-06, Revised 2021-06
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-dev, nep-ene and nep-isf
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Persistent link: https://EconPapers.repec.org/RePEc:kan:wpaper:202116

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