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

Author

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  • Fakih Ali
  • Ghazzawi Nancy

    (Department of Economics, Lebanese American University, Beirut, Lebanon)

  • Ghazalian Pascal

    (University of Lethbridge, Department of Economics, T1K 3M4, Lethbridge, Alberta, Canada)

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.

Suggested Citation

  • Fakih Ali & Ghazzawi Nancy & Ghazalian Pascal, 2020. "The Effects of Power Outages on the Performance of Manufacturing Firms in the MENA Region," Review of Middle East Economics and Finance, De Gruyter, vol. 16(3), pages 1-28, December.
    • Handle: RePEc:bpj:rmeecf:v:16:y:2020:i:3:p:28:n:2
    DOI: 10.1515/rmeef-2020-0011
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    References listed on IDEAS

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    2. Yu, Jian & Liu, Peng & Fu, Dahai & Shi, Xunpeng, 2023. "How do power shortages affect CO2 emission intensity? Firm-level evidence from China," Energy, Elsevier, vol. 282(C).
    3. Guy Assaker & Wassim Shahin, 2022. "What Drives Faculty Publication Citations in the Business Field? Empirical Results from an AACSB Middle Eastern Institution," Publications, MDPI, vol. 10(4), pages 1-29, November.
    4. Presley K. Wesseh & Yuqing Zhong & Chin Hui Hao, 2023. "Electricity Supply Unreliability and Technical Efficiency: Evidence from Listed Chinese Manufacturing Companies," Energies, MDPI, vol. 16(7), pages 1-14, April.
    5. Ekpo, C.G. & Orji, N.O. & Is’haq, A.B., 2022. "Effect of Erratic Electric Power Supply on The Environment," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(11), pages 523-530, November.
    6. Ebuka Christian Orjiakor, 2022. "Business climate and firm exit in developing countries: evidence from Nigeria," Future Business Journal, Springer, vol. 8(1), pages 1-13, December.
    7. Suryadeepto Nag, 2023. "Does Reliable Electricity Mean Lesser Agricultural Labor Wages? Evidence from Indian Villages," Papers 2309.09178, arXiv.org.

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    More about this item

    Keywords

    firm performance; firm productivity; MENA region; power outages; power supply;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

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