Losing to Blackouts: Evidence from Firm Level Data

Abstract

Many developing economies are often hit by electricity crises either because of supplyconstraints or lacking in broader energy market reforms. This study uses manufacturingfirm census data from Ethiopia to identify productivity losses attributable to powerdisruptions. Our estimates show that these disruptions, on average, result in productivitylosses of about 4-10 percent. We found nonlinear productivity losses at different quantilesalong the productivity distribution. Firms at higher quantiles faced higher losses comparedto firms around the median. We observed patterns of systematic shutdowns as firmsattempt to minimize losses.

Keywords: Power disruption, Productivity loss, Shutdowns, Legal Monopolies and Regulation or Deregulation

JEL Classification: D24, E24, L43