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Power Outages and Production Efficiency of Firms in Africa

Author

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  • Anselm Komla Abotsi

    (Department of Economics, University of Education, P. O. Box 25, Winneba, Ghana.)

Abstract

Literature shows that power generation capacity in sub-Sahara Africa is lower than that of any other region in the world and capacity growth has also stagnated. Africa currently faces major electricity shortages with a number of power outages which has the tendency of rendering many firms less efficient in their production. This study therefore seeks to find the impact of power outages on production efficiency of firms in Africa. The source of data is the World Business Environment Survey conducted by the World Bank. The analysis deployed stochastic production frontier and a two-tail Tobit models. The finding shows that the number of power outages experienced in a typical month has a negative impact on the production efficiency of firms in Africa. This call for immense investment projects in new generation capacity in order to ameliorate the negative effect of power crisis on production process of firms in Africa

Suggested Citation

  • Anselm Komla Abotsi, 2016. "Power Outages and Production Efficiency of Firms in Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 6(1), pages 98-104.
    • Handle: RePEc:eco:journ2:2016-01-14
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    References listed on IDEAS

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    3. Graziano Abrate & Federico Boffa & Fabrizio Erbetta & Davide Vannoni, 2013. "Corruption, Accountability and Efficiency. An Application to Municipal Solid Waste Services," Carlo Alberto Notebooks 316, Collegio Carlo Alberto.
    4. Anselm Komla Abotsi & Gershon Yawo Dake & Richard Abankwa Agyepong, 2014. "Factors Influencing Risk Management Decision of Small and Medium Scale Enterprises in Ghana," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 8(4), December.
    5. Mubarik Ali & John C. Flinn, 1989. "Profit Efficiency Among Basmati Rice Producers in Pakistan Punjab," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 303-310.
    6. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Cited by:

    1. Muhammad Luqman & Mirajul Haq & Iftikhar Ahmad, 2021. "Power Outages and Technical Efficiency of Manufacturing Firms: Evidence from Selected South Asian Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 133-140.
    2. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92089, University Library of Munich, Germany, revised 03 Feb 2019.
    3. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92091, University Library of Munich, Germany, revised 04 Feb 2019.
    4. Ramalho,Rita & Saltane,Valentina, 2019. "Does Media Stimulate Reform Efforts ?," Policy Research Working Paper Series 8984, The World Bank.

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    More about this item

    Keywords

    Power Outages; Production Efficiency; Electricity; Africa;
    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

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