The Nexus between Power Outages and Business Enterprise Sales Performance: A South Asian Perspective

ABSTRACT

Purpose: This research investigates the relationship between power shortages and the sales performance of businesses in South Asia (SAR). The study seeks to reveal the impact of electricity supply quality on commercial operations in the region by utilizing a mix of qualitative and quantitative measures, based on data from World Bank enterprise surveys.

Design/Methodology/Approach: The study employs Ordinary Least Squares (OLS) estimation techniques with industry and country fixed effects to account for national and industry-level variations. It utilizes data from the World Bank Enterprise Surveys to assess the influence of electricity supply on business sales, considering both perception-based and quantitative metrics.

Findings: The research consistently demonstrates an inverse relationship between the reliability of electricity supply and business sales performance in SAR. Whether measured by perception-based indicators or quantitative measures, power interruptions and deficiencies are detrimentally linked to sales. While the correlation is statistically significant, it is not exceptionally strong, necessitating caution in formulating broad policy recommendations solely based on these findings.

Implications/Originality/Value: From a policy perspective, the study emphasizes the critical role of perceived electricity infrastructure quality. A reliable electricity supply is found to be paramount for enhancing enterprise sales, regardless of the severity of hindrances identified by businesses. This underscores the importance of prioritizing dependable electricity supply to bolster business operations in the region, offering valuable insights for policymakers and business leaders in South Asia.