Abstract
We estimate the impact of power outages on firm performance using a hydro-instrumental variable strategy which integrates a river flow with a hydropower generation model and an electricity-grid-based distance interpolation technique. Comparing World Bank Enterprise Surveys in 2005 and 2015 for Vietnam, we find that despite considerable economic progress, firms have become more susceptible to power outages. Our estimates suggest that reducing the length of power cuts by 1% would have increased revenues by 4.66 billion USD. Other results show that firms with less reliable electricity have lower productivity and use less flexible inputs, which is not mitigated by backup generators.
Original language | English |
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Article number | 105571 |
Number of pages | 14 |
Journal | Energy Economics |
Volume | 103 |
Early online date | 30 Sept 2021 |
DOIs | |
Publication status | Published - Nov 2021 |
Bibliographical note
Publisher Copyright:© 2021 Elsevier B.V.
Keywords
- Firm performance
- Growth
- Instrumental variables
- Power outages
- Vietnam
ASJC Scopus subject areas
- Economics and Econometrics
- General Energy