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Journal of Industrial and Business Economics

, Volume 46, Issue 4, pp 499–521 | Cite as

The productivity cost of power outages for manufacturing small and medium enterprises in Senegal

  • Lassana CissokhoEmail author
Article
  • 37 Downloads

Abstract

This paper investigates on the productivity effects of power outages on manufacturing small and medium enterprises (SMEs) in Senegal, using a panel data on manufacturing firms. Productivity is estimated using stochastic frontier models, and power outages measured by their frequency or their duration. We controlled for firms owning a generator, relevant covariates as data availability permits as well. The main results are drawn from random effects linear panel model. Nonetheless, the results remain consistent to the robustness checks using different models: a double-sided truncated data model and a generalized linear model, and different productivity measures, using data envelopment analysis. We find that power outages have negative significant effects on the productivity of SMEs in Senegal. Further, firms with a generator were successful in countering the adverse effect of power outages on productivity, this make the negative effect bore only by SMEs, which in some cases cannot afford to own a generator. As a matter of fact, the manufacturing sector lost up to around 15% of the actual productivity due to power outages in 2012, and small and median firms have lost, respectively, around 4.7 and 4.2%. Besides, another important finding is the significant positive effect of access to credit on productivity. At last, it is confirmed that productivity increases with firms’ size.

Keywords

Electricity Productivity SMEs Stochastic frontier analysis Data envelopment analysis 

JEL Classification

D24 F140 L25 L94 M21 

Notes

Acknowledgements

I wish to express my deep appreciation to African Economic Research Consortium (AERC) for the financial support to carry out this research. I am also grateful to the resource persons and members of AERC’s thematic group D for various comments and suggestions that helped the evolution of this study from its inception to completion. Thanks are due to TrustAfrica and Institute for Research Communication and Development in funding the survey of the power outages effect for firms in Senegal (2012). I am indebted to the anonymous referees who reviewed the paper and provided comments and suggestions that helped in shaping and improving the overall quality of the paper. Many thanks to Jonathan Haughton and Darlene Chisholm at Suffolk University, and Babacar Séne at Université Cheikh Anta Diop for commenting early draft of this article.

Funding

This research was funded by the African Economic Research Consortium (AERC) (Grant No. RT15508) in Nairobi (Kenya).

Compliance with ethical standards

Conflict of interest

The author declares that he has no conflict of interest.

Supplementary material

40812_2019_128_MOESM1_ESM.docx (96 kb)
Supplementary material 1 (DOCX 96 kb)

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Copyright information

© Associazione Amici di Economia e Politica Industriale 2019

Authors and Affiliations

  1. 1.Faculte des Sciences Economiques et de GestionUniversité Cheikh Anta DiopDakar FannSenegal

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