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Productivity Losses and Firm Responses to Electricity Shortages: Evidence from Ghana

Author

Listed:
  • Ama Baafra Abeberese
  • Charles Godfred Ackah
  • Patrick Opoku Asuming

Abstract

One of the commonly cited obstacles to firms’ operations in developing economies is inadequate access to electricity. This paper explores the impact of electricity outages on firm productivity using arguably exogenous variation in outages, induced by an electricity rationing program, across small and medium-sized Ghanaian manufacturing firms. The results indicate that eliminating outages in this setting could lead to an increase in firm productivity. Further analyses of the strategies firms use to cope with outages show that changing the firm's product mix to favor less electricity-intensive products mitigates the negative impacts of outages on productivity. However, using a generator, a common strategy in many parts of the world, is unable to insulate firms from the negative impacts of outages on productivity.

Suggested Citation

  • Ama Baafra Abeberese & Charles Godfred Ackah & Patrick Opoku Asuming, 2021. "Productivity Losses and Firm Responses to Electricity Shortages: Evidence from Ghana," The World Bank Economic Review, World Bank, vol. 35(1), pages 1-18.
    • Handle: RePEc:oup:wbecrv:v:35:y:2021:i:1:p:1-18.
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    File URL: http://hdl.handle.net/10.1093/wber/lhz027
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    Citations

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    Cited by:

    1. Asiedu, Elizabeth & Azomahou, Théophile T. & Gaekwad, Neepa B. & Ouédraogo, Mahamady, 2021. "The determinants of electricity constraints by firms in developing countries," Energy Economics, Elsevier, vol. 104(C).
    2. Abiodun, Kehinde & Gilbert, Ben, 2022. "Does universal electrification shield firms from productivity loss?," World Development Perspectives, Elsevier, vol. 28(C).
    3. Guo, Dongmei & Li, Qin & Liu, Peng & Shi, Xunpeng & Yu, Jian, 2023. "Power shortage and firm performance: Evidence from a Chinese city power shortage index," Energy Economics, Elsevier, vol. 119(C).
    4. 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).
    5. Chen, Hao & Jin, Lu & Wang, Mingming & Guo, Lin & Wu, Jingwen, 2023. "How will power outages affect the national economic growth: Evidence from 152 countries," Energy Economics, Elsevier, vol. 126(C).
    6. Simona Galano & Luca Sessa & Simone ZuccolalÃ, 2022. "The quality of electricity supply: a comparison among Italian regions," Questioni di Economia e Finanza (Occasional Papers) 737, Bank of Italy, Economic Research and International Relations Area.
    7. Mensah, Justice Tei, 2024. "Jobs! Electricity shortages and unemployment in Africa," Journal of Development Economics, Elsevier, vol. 167(C).

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