The Determinants of Electricity Constraints by Firms in Developing Countries

This paper employs survey data from 110,398 firms in 108 developing countries to determine the firm and country characteristics that affect the probability that a firm is energy poor, i.e., the firm will report that electricity is an obstacle to the firm's operations. We find that firms that experienced power outages, manufacturing firms, foreign-owned firms and firms that are engaged in R&D or innovate are more likely to be energy poor. In contrast, majority-owned government firms, older firms and firms located in a city are less likely to be energy poor. The gender of the firm owner and the size of the firm are not correlated with firm energy poverty. Among firms that experienced power outages, firm energy poverty increases with the frequency as well as the duration of outages. Finally, we find that firms located in countries with weak institutions and in countries where residents have limited access to electricity are more likely to be energy poor