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Power Outages and Technical Efficiency of Manufacturing Firms: Evidence from Selected South Asian Countries

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  • Muhammad Luqman

    (Kashmir Institute of Economics, University of Azad Jammu and kashmir, Muzaffarabad, Azad Jammu and Kashmir, and PhD scholar at Department of Economics Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan,)

  • Mirajul Haq

    (International Institute of Islamic Economics, International Islamic University, Islamabad, Pakistan,)

  • Iftikhar Ahmad

    (Department of Public Policy, Pakistan Institute of Development Economics, Islamabad, Pakistan)

Abstract

The deficiency of secure and reliable electrical power is a constraint to firm performance and its competitiveness in developing countries. Several countries in the south Asian region face electricity shortages leading to frequent power outages. This study investigate the effect of power outages on the technical efficiency of firms in selected South Asian countries. The study employed the stochastic frontier approach to estimate the technical efficiency of firms. We use the OLS and Beta regression to estimate the effect of power outages on technical efficiency of manufacturing firms. The results of the study reveal that power outages reduce the technical efficiency of manufacturing firms operating in selected South Asian countries. These results are robust to the alternative empirical specifications and estimation techniques. Overall results suggest that South Asian countries should invest in the secure and reliable energy to amplify productivity growth and resulted competitiveness of firms in global market.

Suggested Citation

  • 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.
    • Handle: RePEc:eco:journ2:2021-02-18
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    References listed on IDEAS

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    Cited by:

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    2. Eduardo Correia & Rodrigo Calili & José Francisco Pessanha & Maria Fatima Almeida, 2023. "Definition of Regulatory Targets for Electricity Non-Technical Losses: Proposition of an Automatic Model-Selection Technique for Panel Data Regressions," Energies, MDPI, vol. 16(6), pages 1-22, March.
    3. Samuel David Adebisi & Raymond Osi Alenoghena & Ayobola Olufolake Charles, 2023. "Impact of Energy Supply on Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(2), pages 959-969, February.
    4. Elfarra, Barakat & Yasmeen, Rizwana & Shah, Wasi Ul Hassan, 2024. "The impact of energy security, energy mix, technological advancement, trade openness, and political stability on energy efficiency: Evidence from Arab countries," Energy, Elsevier, vol. 295(C).

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    More about this item

    Keywords

    Technical Efficiency; Power Outages; Manufacturing Firms; South Asia;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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