IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10770.html
   My bibliography  Save this paper

Electricity Reliability and Intra-Sectoral Structural Change in Sub-Saharan Africa : Evidence from Medium-Sized Manufacturing Firms

Author

Listed:
  • Kaba,Kabinet
  • Tchana Tchana,Fulbert

Abstract

Although access to reliable electricity enables manufacturing companies to increase their output, there have been few studies of the distribution of output growth between export and domestic markets. Although some papers have examined the impact of electricity reliability on exports (in volume terms or dummy terms), little is known about the way electricity reliability can push existing manufacturing firms more into the export market. Using the World Bank Enterprise Surveys, this paper examines a sample of 13,025 manufacturing firms surveyed in 39 Sub-Saharan African countries between 2006 and 2022. The paper employs the entropy balancing approach to examine how access to reliable electricity affects the distribution of manufacturing firms' sales between export and domestic markets. The results show that for medium-sized manufa cturing firms, electricity access increases the share of exports in total sales at the expense of the share of domestic sales. However, the results for small and large manufacturing companies are not statistically significant. Among medium-sized manufacturing enterprises, domestic companies improve their exports relative to domestic sales when they have access to electricity, with mixed results for foreign companies. Even in resource-intensive countries, electricity access enhances the share of exports relative to domestic sales. The intra-sectoral structural change induced by power access is not limited to medium-sized companies in the manufacturing sector; the same pattern is observed in the service sector with mixed findings.

Suggested Citation

  • Kaba,Kabinet & Tchana Tchana,Fulbert, 2024. "Electricity Reliability and Intra-Sectoral Structural Change in Sub-Saharan Africa : Evidence from Medium-Sized Manufacturing Firms," Policy Research Working Paper Series 10770, The World Bank.
  • Handle: RePEc:wbk:wbrwps:10770
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/099448205152458890/pdf/IDU199436e3a1001f143af18c561a24b3e98279a.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. McMillan, Margaret & Rodrik, Dani & Verduzco-Gallo, Íñigo, 2014. "Globalization, Structural Change, and Productivity Growth, with an Update on Africa," World Development, Elsevier, vol. 63(C), pages 11-32.
    2. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    3. Neuenkirch, Matthias & Neumeier, Florian, 2016. "The impact of US sanctions on poverty," Journal of Development Economics, Elsevier, vol. 121(C), pages 110-119.
    4. Dani Rodrik, 2018. "An African Growth Miracle?," Journal of African Economies, Centre for the Study of African Economies, vol. 27(1), pages 10-27.
    5. Elizabeth Garnsey & Erik Stam & Paul Heffernan, 2006. "New Firm Growth: Exploring Processes and Paths," Industry and Innovation, Taylor & Francis Journals, vol. 13(1), pages 1-20.
    6. Hippolyte Balima, Wenéyam, 2017. "Do domestic bond markets participation help reduce financial dollarization in developing countries?," Economic Modelling, Elsevier, vol. 66(C), pages 146-155.
    7. Mensah, Justice Tei, 2024. "Jobs! Electricity shortages and unemployment in Africa," Journal of Development Economics, Elsevier, vol. 167(C).
    8. Thomas Farole, 2011. "Special Economic Zones in Africa : Comparing Performance and Learning from Global Experience," World Bank Publications - Books, The World Bank Group, number 2268.
    9. Christian Bellak, 2004. "How Domestic and Foreign Firms Differ and Why Does it Matter?," Journal of Economic Surveys, Wiley Blackwell, vol. 18(4), pages 483-514, September.
    10. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2016. "How Do Electricity Shortages Affect Industry? Evidence from India," American Economic Review, American Economic Association, vol. 106(3), pages 587-624, March.
    11. Moyo, Busani, 2013. "Power infrastructure quality and manufacturing productivity in Africa: A firm level analysis," Energy Policy, Elsevier, vol. 61(C), pages 1063-1070.
    12. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    13. Elizabeth Asiedu, 2006. "Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability," The World Economy, Wiley Blackwell, vol. 29(1), pages 63-77, January.
    14. Fafchamps, Marcel, 1997. "Trade credit in Zimbabwean manufacturing," World Development, Elsevier, vol. 25(5), pages 795-815, May.
    15. Segundo Camino-Mogro & Xavier Ordeñana-Rodríguez & Paul Vera-Gilces, 2023. "Learning-by-exporting vs. self-selection in Ecuadorian manufacturing firms: Evidence from different industry classifications," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 32(2), pages 281-312, February.
    16. Elizabeth Asiedu & Isaac Kalonda-Kanyama & Leonce Ndikumana & Akwasi Nti-Addae, 2013. "Access to Credit by Firms in Sub-Saharan Africa: How Relevant Is Gender?," American Economic Review, American Economic Association, vol. 103(3), pages 293-297, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Balima, Hippolyte Weneyam, 2020. "Coups d’état and the cost of debt," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 509-528.
    2. Ablam Estel APETI & Bao-We-Wal BAMBE & Jean Louis COMBES, 2022. "On the Macroeconomic Effects of Fiscal Reforms : Fiscal Rules and Public Expenditure Efficiency," LEO Working Papers / DR LEO 2985, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    3. Hippolyte Balima & Amadou Sy, 2021. "IMF-Supported Programs and Sovereign Debt Crises," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(2), pages 427-465, June.
    4. KOUAKOU, Dorgyles C.M. & YEO, Kolotioloma I.H., 2023. "Can innovation reduce the size of the informal economy? Econometric evidence from 138 countries," MPRA Paper 119264, University Library of Munich, Germany.
    5. Sawadogo, Pegdéwendé Nestor, 2020. "Can fiscal rules improve financial market access for developing countries?," Journal of Macroeconomics, Elsevier, vol. 65(C).
    6. KOUAKOU, Dorgyles C.M., 2024. "Can past informality impede registered firms' access to credit?," MPRA Paper 121766, University Library of Munich, Germany.
    7. Ablam Estel Apeti, 2022. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," Post-Print hal-03819779, HAL.
    8. Bao-We-Wal BAMBE & Jean Louis COMBES & Kabinet KABA & Alexandru MINEA, 2022. "Inflation Targeting and Developing countries’ Performance: Evidence from Firm-Level Data," LEO Working Papers / DR LEO 2941, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    9. Yacouba Coulibaly, 2023. "Can Resource-backed Loans Mitigate Climate Change ?," Working Papers hal-04072352, HAL.
    10. John Page, 2016. "Industry in Tanzania: Performance, prospects, and public policy," WIDER Working Paper Series wp-2016-5, World Institute for Development Economic Research (UNU-WIDER).
    11. Apeti, Ablam Estel & Edoh, Eyah Denise, 2023. "Tax revenue and mobile money in developing countries," Journal of Development Economics, Elsevier, vol. 161(C).
    12. Apeti, Ablam Estel & Ly, Alpha, 2024. "Power constraints and firm-level total factor productivity in developing countries," Energy, Elsevier, vol. 309(C).
    13. Claudia Maurini, 2019. "IMF programs and stigma in Emerging Market Economies," Temi di discussione (Economic working papers) 1247, Bank of Italy, Economic Research and International Relations Area.
    14. Cezara Vinturis, 2023. "How do fiscal rules shape governments' spending behavior?," Economic Inquiry, Western Economic Association International, vol. 61(2), pages 322-341, April.
    15. Apeti,Ablam Estel & Ly,Alpha, 2023. "Power Constraints and Firm-Level Total Factor Productivity in Developing Countries," Policy Research Working Paper Series 10510, The World Bank.
    16. Dorgyles C.M. Kouakou, 2024. "The effect of informal competition on registered firms’ credit constraints: Global evidence, channels, and the roles of productivity and financial development," Economics Working Paper Archive (University of Rennes & University of Caen) 2024-10, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    17. Luitel, Prabesh & Vanpée, Rosanne, 2018. "How do sovereign credit ratings help to financially develop low-developed countries?," ECMI Papers 13956, Centre for European Policy Studies.
    18. Kabinet Kaba, 2021. "Exports Promotion Policies for African Manufacturing Firms : Does electricity infrastructure matter more than exchange rate undervaluation ?," Working Papers hal-03548456, HAL.
    19. Dorgyles C.M. Kouakou, 2024. "Can past informality impede registered firms’ access to credit?," Economics Working Paper Archive (University of Rennes & University of Caen) 2024-08, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    20. Ly, Alpha & Chakir, Raja & Creti, Anna, 2024. "Electrification or deforestation? Evidence from household practices in Côte d’Ivoire," Energy Economics, Elsevier, vol. 136(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:10770. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.