Firms operating under infrastructure and credit constraints in developing countries: The case of power generators

Alby, Philippe; Dethier, Jean-Jacques; Straub, Stéphane

doi:10.1596/1813-9450-5497

Cited by 10 publications

(14 citation statements)

References 15 publications

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“…In our sample of tailors, 10 per cent have a generator, but only 3 per cent report that they are actually using it. Following work by Alby et al (2010), one reason for the low penetration of generators could be a lack of capital and the high cost of operating them.…”

Section: Results Based On the Tailor Surveymentioning

confidence: 99%

Electricity Access and the Performance of Micro and Small Enterprises: Evidence from West Africa

2013

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Although it is widely accepted that electricity access is important for enterprise performance, the empirical evidence on the subject is mixed. In addition, evidence is scarce for micro and small enterprises operating in the informal sector. On the basis of a representative sample of informal firms in seven West African cities, we do not find evidence of a systematic, significant contribution of electricity access to enterprise performance. However, concentrating on a more homogeneous sample of tailors in Ouagadougou, we find that electricity can potentially exert a positive influence on performance, with electricity contributing to the uptake of modern machinery and business operation. Our findings are another illustration of the heterogeneity of the informal sector, which needs to be taken into account when policy interventions intend to overcome the growth constraints of firms operating in this segment of the economy.S'il est largement reconnu que l'accès à l'électricité joue un rôle important dans la performance des entreprises, les données empiriques sur la question sont mitigées. Qui plus est, peu d'informations sont disponibles concernant les petites et micro-entreprises opérant dans le secteur informel. Nous constatons, à partir d'un échantillon représentatif d'entreprises informelles de sept villes d'Afrique occidentale, qu'il n'existe aucune donnée démontrant un effet positif systématique et significatif de l'accès à l'électricité sur la performance des entreprises. Cependant, en examinant de près un échantillon plus homogène de tailleurs travaillant à Ouagadougou, nous observons un effet positif de l'électricité, l'accès à cette dernière favorisant l'adoption de machines modernes et contribuant au fonctionnement des entreprises. Nos résultats offrent une nouvelle illustration de l'hétérogénéité du secteur informel, qui doit être prise en compte lors de l'élaboration de politiques publiques destinées à aider les entreprises opérant dans ce segment de l'économie à surmonter les obstacles à la croissance.

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Section: Results Based On the Tailor Surveymentioning

confidence: 99%

Electricity Access and the Performance of Micro and Small Enterprises: Evidence from West Africa

2013

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“…Because not all industrial sectors are represented 14. In a previous version of this paper (Alby, Dethier, and Straub, 2010), we approximated the nonlinear shape with a quadratic specification of outages instead of the logarithmic one and showed that the turning point was lower for electricity-intensive sectors.…”

Section: E M P I R I C a L A N A L Y S I Smentioning

confidence: 99%

“…17. Descriptive statistics on these credit constraints measures are in Alby, Dethier, and Straub (2010).…”

Section: E M P I R I C a L A N A L Y S I Smentioning

confidence: 99%

Firms Operating under Electricity Constraints in Developing Countries

Alby¹,

Dethier²,

Straub³

2012

The World Bank Economic Review

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Many developing countries are unable to provide their industrial sectors with reliable electric power, with the result that many enterprises must contend with an insufficient and unreliable supply of electricity. Because of these constraints, enterprises often opt for self-generation of electricity even though it is widely considered a second-best solution. This paper develops a theoretical model of investment behavior in remedial infrastructure in the presence of physical constraints. It then illustrates the model's predictions using a large crosscountry sample of enterprises from the World Bank Enterprise Survey database. Electricity-intensive sectors in high-outage countries are characterized by a significantly lower share of small firms. JEL codes: H54, L94, L16 And God said, 'Let there be light' and there was light, but the Electricity Board said He would have to wait until Thursday to be connected.

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“…In our sample of tailors, 10% have a generator, but only 3% actually report using it. Following work by Alby et al (2010), one reason for the low penetration of generators could be a lack of capital or the high cost of operating them. This links back to the results presented above regarding the role of credit.…”

Section: Using the Tailor Surveymentioning

confidence: 99%

How Much Does Utility Access Matter for the Performance of Micro and Small Enterprises?

Grimm

Hartwig²,

Lay³

2012

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The empirical evidence of the economic benefits of different utilities such as electricity, telecommunications and water is mixed and, in the case of micro and small enterprises, relatively thin. This paper therefore revisits this issue. Based on a unique, albeit crosssectional, micro data set of informal firms in West-Africa, we find hardly any evidence for a significant contribution of access to different infrastructure services on enterprise performance. This absence of a systematic influence is attributed to the large heterogeneity of activities, motives and resources with which these informal firms operate. However, concentrating on a more homogenous sample of tailors in Ouagadougou, we find that their performance is positively influenced by access to electricity. In conclusion, our findings stress the heterogeneity of the informal sector, implying that a 'one-size-fits all' approach to the development of this sector is of little help. We also call for more disaggregated analysis in identifying key constraints.

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Firms operating under infrastructure and credit constraints in developing countries: The case of power generators

Cited by 10 publications

References 15 publications

Electricity Access and the Performance of Micro and Small Enterprises: Evidence from West Africa

Electricity Access and the Performance of Micro and Small Enterprises: Evidence from West Africa

Firms Operating under Electricity Constraints in Developing Countries

How Much Does Utility Access Matter for the Performance of Micro and Small Enterprises?

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