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Power outages and firm performance: a hydro-IV approach for a single electricity grid

Elliott, Robert J.R., Nguyen-Tien, Viet and Strobl, Eric A. (2021) Power outages and firm performance: a hydro-IV approach for a single electricity grid. Energy Economics, 103. ISSN 0140-9883

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Identification Number: 10.1016/j.eneco.2021.105571

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.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/energy-econo...
Additional Information: © 2021 Elsevier B.V.
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
N - Economic History > N5 - Agriculture, Natural Resources, Environment, and Extractive Industries > N55 - Asia including Middle East
Date Deposited: 01 Nov 2021 15:12
Last Modified: 17 Nov 2021 01:17
URI: http://eprints.lse.ac.uk/id/eprint/112538

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