The Productivity Cost of Power Outages for Manufacturing Small and Medium Enterprises in Senegal
Date
2020-09-22
Authors
Cissokho, Lassana
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
This paper investigates the productivity effects of power outages on manufacturing
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 as well. The main results are
drawn from random effects in a 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:
data envelopment analysis. We find that power outages have negative significant
effects on the productivity of SMEs. For example, the manufacturing sector lost up
to around 11.6% of the actual productivity due to power outages in 2011, and small
firms appear to be affected more than medium ones, 5% against 4.3%. Further, firms
with a generator were successful in countering the adverse effect of power outages
on productivity. Besides, another outstanding result is the significant positive effect
of access to credit on productivity. At last, it appears that productivity increases with
firms’ size