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Water and Its Effect on Business Productivity: A Cross-Country Analysis

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  • Vasanthakumar Bhat

Abstract

Using a unique survey database of more than 55,000 firms in more than 100 countries, we explore the impact of water and its scarcity on firms. Even though, about 1 in 3 firms require water and 1 in 4 of those firms experience insufficient water supply, productivity of firms using water is higher than productivity of firms not requiring water. Even with or without water shortage problems, productivity of large firms using water is higher than productivity of all other firms. Productivity of manufacturing firms requiring no water is lower than productivity of all other firms. A firm’s perception about corruption does not have any influence on its productivity irrespective of whether it uses water or it experiences water scarcity. Copyright Springer Science+Business Media Dordrecht 2015

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  • Vasanthakumar Bhat, 2015. "Water and Its Effect on Business Productivity: A Cross-Country Analysis," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(11), pages 4007-4020, September.
    • Handle: RePEc:spr:waterr:v:29:y:2015:i:11:p:4007-4020
    DOI: 10.1007/s11269-015-1042-7
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    References listed on IDEAS

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    1. Gatti, Roberta & Love, Inessa, 2006. "Does access to credit improve productivity ? Evidence from Bulgarian firms," Policy Research Working Paper Series 3921, The World Bank.
    2. P. Oel & A. Hoekstra, 2012. "Towards Quantification of the Water Footprint of Paper: A First Estimate of its Consumptive Component," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(3), pages 733-749, February.
    3. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    4. A. Ercin & Maite Aldaya & Arjen Hoekstra, 2011. "Corporate Water Footprint Accounting and Impact Assessment: The Case of the Water Footprint of a Sugar-Containing Carbonated Beverage," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(2), pages 721-741, January.
    5. Se-Ju Ku & Seung-Hoon Yoo, 2012. "Economic Value of Water in the Korean Manufacturing Industry," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(1), pages 81-88, January.
    6. Roberta Gatti & Inessa Love, 2008. "Does access to credit improve productivity? Evidence from Bulgaria1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(3), pages 445-465, July.
    7. A. Hoekstra & A. Chapagain, 2007. "Water footprints of nations: Water use by people as a function of their consumption pattern," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 21(1), pages 35-48, January.
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    Cited by:

    1. Otienoa, Jackson & Cook, Joseph & Fuente, David, 2023. "The coping costs of dealing with unreliable water supply in the Nairobi commercial sector," EfD Discussion Paper 23-3, Environment for Development, University of Gothenburg.
    2. Randy A. Becker, 2016. "Water Use and Conservation in Manufacturing: Evidence from U.S. Microdata," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(12), pages 4185-4200, September.
    3. Randy A. Becker, 2016. "Water Use and Conservation in Manufacturing: Evidence from U.S. Microdata," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(12), pages 4185-4200, September.

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    Keywords

    Water; Scarcity; Productivity;
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