Working Paper
Jobs, investments, and exporting: the real effects of electricity crises in South Africa

South Africa’s grid remains unstable and characterized by frequent power cuts. Employing a generalized difference-in-difference approach, this paper examines the implications of South Africa’s electricity crises on jobs, capital investment, and exporting across manufacturing firms in the country. 

Our results show robust evidence that the electricity crises have destroyed jobs, lowered capital investments, and upended export activities of manufacturing firms, with this adverse effect severe for firms with higher energy vulnerability intensity. 

Furthermore, we find that differing sources of firm heterogeneity vis-à-vis ownership structure, age, size, and financial status modulate the impact of electricity crises on firm performance. 

Overall, these results indicate that policies aimed to help firms cope with the impact of the electricity crises must take into consideration the unique differences across and between manufacturing firms.