The impact of electricity shortages on firm productivity: evidence from Pakistan

Corbett Alden Grainger and Fan Zhang

No 8130, Policy Research Working Paper Series from The World Bank

Abstract: Power shortages present a significant challenge to manufacturers, who rely on power as a key input to production. In Pakistan, power shortages are commonplace, but empirical evidence on the impact of shortages is still lacking. Using a survey of 4,500 manufacturing firms for the year 2010-11, this paper estimates the impact of electricity shortages on firm productivity in Pakistan. The analysis finds that a 10 percent increase in the duration of outages on average leads to a 0.14 percent decrease in a firm's total revenue and a 0.36 percent decrease in the value added, all else being equal. There is heterogeneity in the impacts of shortages across sectors: the industries that are most energy-intensive, such as manufacturers of metal, wood, and paper, are affected the most severely by shortages.

Keywords: Power&Energy Conversion; Services&Transfers to Poor; Disability; Access of Poor to Social Services; Economic Assistance; Energy Policies&Economics (search for similar items in EconPapers)
Date: 2017-06-29
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Citations: View citations in EconPapers (10)

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