<mark>The second element is measuring energy price shocks. We use the commercial electricity rate shown in Figure 1, compiled quarterly by Global Petrol Prices for each country. For the countries included in the sample, electricity rates, on average, fell during 2020 and 2021, reaching their nadir in the last quarter of 2021. Subsequently, there was a recovery in the rates during 2022. The price fuctuaton ranged from $0.03 to $0.38 per kWh. In the case of oil prices, the range was between $33.7 and $113.</mark> The third aspect refers to fossil fuel subsidies. We measure this aspect using the IMF data (Black et al., 2023), which provide, for 170 countries, the estimates of explicit subsidies for fossil fuels, i.e., undercharging for the supply cost of fossil fuels. All but five countries in the dataset, among them Tajikistan, have no (zero) petroleum subsidies. In the case of explicit subsidies for electricity, only three countries in the dataset do not have subsidies. Considering countries with explicit subsidies, the petroleum subsidies range from 0.00004 to 3.58 percent of GDP, while electricity subsidies range from 0.04 to 9.76 percent of GDP. The distributions of such subsidies overtime are depicted in Figures 3 (panels a and b).

<mark>The fourth data aspect concerns frms' adopton of energy efciency practces. This is a crucial factor because it can signifcantly infuence a frm's resilience to energy price fuctuatons. To account for these practces, we draw on data from the BPS, which features a module focused on frms' energy efciency measures. The survey queries frms on implementng technologies or methods to improve energy usage efciency. Those who have adopted energy efciency solutons are prompted to detail the specifc technologies or practces in use. These practces encompass questons about LEED certfcaton for buildings, adoptng efcient lightng systems, adherence to ISO 14001 or 50001 standards, or engagement in carbon trading schemes. About 38 percent of the surveyed frms acknowledge that they do not employ energy efciency technologies or practces. Yet, this fgure masks considerable cross-country heterogeneity. For example, in Armenia, 99 percent of the surveyed frms reported using at least one energy-saving approach. By contrast, in Paraguay, a striking 86 percent of frms indicated they do not engage in any such practces. For a more detailed breakdown, see Table A2 in the Annex.</mark>

# **3. Estimation methodology**

<mark>To assess the impact of energy shocks on frm performance, we utlize the BPS sample for 24 developing countries over the 2019-2023 period, covering large fuctuatons in country-level electricity prices. We hypothesize that a frm's susceptbility to the energy price shock is contngent on the shock's magnitude at a specifc tme, the frm's energy requirements for its operatons that we assume are sector-specifc, and any energy efciency measures or lack thereof that can make the frm-level energy efciency deviate from its sector’s average.</mark> <mark>As explained in the data secton, the variatons in the shock intensity are quantfed through the monthly electricity data for each country matched to frm surveys by the month of the frms’ interviews. The BPS data's unique advantage lies in recording the precise survey date for each frm, introducing frm-level variaton in shock exposure across countries. This aspect is critcal as the shock's magnitude is shown to vary from month to month (Figure 2). The energy usage intensity is determined based on CPRS classifcaton; sectors such as manufacturing, constructon, and transportaton are categorized as energyintensive, in contrast to agriculture, retail, and other services, which are classifed as less energy-intensive using the Batston et al. (2022) methodology which is predetermined at the global level and not infuenced by frm or sector energy technology adopton at the country level.</mark> 6