Countries with better quality infrastructure tend to grow faster. This stylised fact is investigated by examining the effect of poor electricity infrastructure, measured as the average number of power outages experienced by firms per month within a certain region, on labour productivity. By estimating an enterprise level random effects model on an unbalanced panel of over 1,000 manufacturing firms in 16 African countries between 2006 and 2015, the findings suggest that a one unit increase in the number of electricity outages at a regional level, corresponding to around a 10 percent increase, is associated with a reduction in labour productivity of around 2 percent. Furthermore, the findings indicate that owning a generator does not appear to significantly reduce the impact of poor electricity reliability and that the impact may be non-linear and increasing in the number of outages.

Emami Namini, J.
hdl.handle.net/2105/34819
Business Economics
Erasmus School of Economics

Ostermeijer, Francis. (2016, August 26). Costly outages: The Economic Cost of Unreliable Electricity Infrastructure in Africa. Business Economics. Retrieved from http://hdl.handle.net/2105/34819