Harmonized core data is obtained from the World Bank’s Enterprise Surveys, where firms report on the quality of electricity infrastructure, including the average monthly frequency and duration of service disruptions, as well as self-reported estimates of the annual loss of sales that are caused by electricity outages. It should be noted that the latter variable may in principle suffer from measurement errors. Without strict monitoring, firms may not be able to provide accurate estimates of outage-induced annual sales losses. Nevertheless, the data provides an indication of the perceived burden of power outages on businesses – consistent across this global panel of businesses.

We further control for a series of variables at the firm and country levels, including country and sector fixed effects. For this purpose, the data is obtained from either the Enterprise Surveys or the World Development Indicators database by the World Bank. Specifically, we control for firms’ age, employment, inventory, state-ownership, export intensity, and generator ownership. Moreover, the model controls for the country-level output gap, electrification rate, water access rate, total population size, population density, urbanization and “Government Effectiveness”, as measured by the Governance Indicators (Kaufmann, Kraay, & Mastruzzi, 2010).

The model is fit to a pooled dataset of 43,829 firms from 106 predominantly middle- and low- income countries, sampled between 2007 and 2014. Estimation is conducted by weighted ordinary least squares using normalized sample design stratification weights that sum to unity for each survey wave. Standard errors are clustered at the regional level to account for regressor correlation with region fixed effects and uncertainty about regressors’ marginal effects being region-specific. The use of sectoral dummy interactions allows us to disaggregate slope coefficients by International Standard Industrial Classification (ISIC, revision 3.1) sectors, and thus assess sector-specific vulnerabilities.

Table 4: The impact of power outages on self-reported sales losses. Table 7 presents the full sectoral disaggregation of estimated coefficients.

|Dep.: Relative blackout sales losses|(I)|(II)|(III)|
|---|---|---|---|
|Model variables|No interactions|with 2nd order term|with ISIC<br>interactions|
|Blackout<br>_annual hours_|0.0029***<br>_(0.0004)_|0.0073***<br>_(0.0009)_|0.0066***<br>_(0.0009)_|
|Blackout<sup>2</sup>||-0.0008***|-0.0008***|
|_second order term, x10_<sup>_-3_</sup>||_(0.0001)_|_(0.0001)_|
|Blackout x ISIC:|||_see Annex A.3_|
|Firm age|-0.0056|-0.0032|-0.0019|
|_years since official registration_|_(0.0056)_|_(0.0056)_|_(0.0055)_|
|Employment|-0.0025***|-0.0023***|-0.0020***|
|_number of full time employees_|_(0.0006)_|_(0.0006)_|_(0.0005)_|
|Inventory|0.0020|0.0017|0.0017|
|_days for most important input_|_(0.0028)_|_(0.0027)_|_(0.0026)_|
|State ownership|-0.0001|0.0034|0.0040|
|_in %_|_(0.0110)_|_(0.0122)_|_(0.0123)_|
|Export orientation|-0.0056*|-0.0047|-0.0050*|
|_% of total sales_|_(0.0030)_|_(0.0029)_|_(0.0028)_|
|Generator ownership|0.3628|0.2225|0.2125|
|_Dummy_|_(0.3929)_|_(0.3910)_|_(0.3888)_|
|ISIC Sector Fixed Effects|YES|YES|YES|
|Output Gap|0.1859**|0.1732*|0.1746*|
|_HP residual as % of HP trend_|_(0.0924)_|_(0.0913)_|_(0.0906)_|

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