Firms and Development

Paper Session

Friday, Jan. 6, 2017 8:00 AM – 10:00 AM

Hyatt Regency Chicago, Field
Hosted By: Econometric Society
  • Chair: David Atkin, Massachusetts Institute of Technology

Lights Off, Lights On: The Effects of Electricity Shortages on Small Firms

Jamie McCasland
,
University of California-Berkeley

Abstract

The Ghanaian Dumsor energy crisis of 2014/2015 led to dramatic, frequent, and largely unpredictable outages around the country. This paper exploits variation across garment making firms in self-reported blackout days using daily data over 7 weeks, combined with weekly panel data on firm inputs, outcomes, and network activity to study the effects of electricity shortages on small firms. We supplement our main identification with data on government load shedding schedules, and gps data on all electricity transformers in our sample area. Blackouts lead to economically meaningful declines in both weekly revenues and weekly profits; each additional blackout day is associated with an 11% decrease in weekly profits on average. Firm owners respond to blackouts by working fewer hours during blackouts, without fully shifting labor supply onto non-blackout days. Expenditures on wages fall, suggesting that firm owners may shift from the use of higher paid workers to low wage apprentices. Revenue and profit effects are largest for firms with a higher share of electric (versus human-powered) equipment, though we see little evidence of shifts in equipment type over the period. Effects are smallest for firms with at least one apprentice at baseline and firm owners who have network contacts in the industry who had access to power on days on which the firm was experiencing a blackout.

Productivity and Competition in India's Brick Industry

Daniel Keniston
,
Yale University

Abstract

Productivity and Competition in India's Brick Industry

Transfer Pricing

Sebastian Bustos
,
Harvard University
Dina Pomeranz
,
Harvard University

Abstract

Transfer Pricing

Measuring the Competitiveness of Markets and Predicting the Impact of Policy

Gharad Bryan
,
London School of Economics and Political Science

Abstract

Measuring the Competitiveness of Markets and Predicting the Impact of Policy
JEL Classifications
  • O0 - General