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Power shortage and firm performance: Evidence from a Chinese city power shortage index

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  • Guo, Dongmei
  • Li, Qin
  • Liu, Peng
  • Shi, Xunpeng
  • Yu, Jian

Abstract

Extreme climate events and renewable energy development challenge the reliability of the power supply, which is an important guarantee for high-quality economic development and the production and operation of firms. In this paper, we analyzed the relationship between power shortage and firm productivity by developing a city-level power shortage index in China using the text analysis method. The results indicate that power shortage reduces the probability, quantity, and quality of R&D investment and has a negative impact on the total factor productivity (TFP) of firms. However, it has a smaller negative impact on the TFP of large- and medium-sized firms, export-oriented firms, and state-owned firms than others. Our results are robust to alternative measures of power shortage.

Suggested Citation

  • Guo, Dongmei & Li, Qin & Liu, Peng & Shi, Xunpeng & Yu, Jian, 2023. "Power shortage and firm performance: Evidence from a Chinese city power shortage index," Energy Economics, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:eneeco:v:119:y:2023:i:c:s0140988323000919
    DOI: 10.1016/j.eneco.2023.106593
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