The impact of electricity blackouts on the performance of small-sized manufacturing enterprises: evidence from Indonesia
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PhD Seminar (Econ)
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Indonesia, home to more than 3.5 million micro and small enterprises (MSEs) in the manufacturing industry, is struggling to provide reliable electricity supply in some regions. Little is known about how the power blackouts affect MSE performance. This paper estimates the impact of electricity blackouts on the productivity of Indonesia’s MSEs. A pseudo-panel dataset covering the period 2004–2015 is employed. The estimates suggest that a one-percent increase in blackout frequency is associated with a 0.1 percent reduction in labour productivity. Furthermore, this paper shows the effect of adopting a generator on MSE productivity. A discussion of the role of the government in addressing the blackouts problem will be provided.
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