2008年-世界发展银行全球_Effects_of_Improving_Infrastructure_Quality_on_Business_Costs___Evidence_from_Firm-Level_Data_24页_193kb

Summary of "Effects of Improving Infrastructure Quality on Business Costs: Evidence from Firm-Level Data"

Core Content

This policy research working paper investigates the impact of infrastructure quality on business costs using firm-level data from 26 countries in Europe and Central Asia (ECA) collected through the 2005 Business Environment and Enterprise Productivity Survey (BEEPS). The study focuses on three types of infrastructure: electricity, water supply, and telecommunications, and assesses how variations in the quality and reliability of these services affect firm operating costs.

Main Findings

• Infrastructure Quality and Business Costs: The quality of infrastructure services, particularly electricity and water, has a significant impact on business costs. Reliability and continuity of services are critical for firm performance.
• Electricity Outages: Firms experience a notable increase in costs when electricity outages are frequent and prolonged. The average outage duration for electricity is around 2.5 hours per day, and the number of days without sufficient electricity supply is approximately 10 per year.
• Water Supply Suspensions: Similarly, increased hours of water service suspensions negatively affect firm competitiveness. The average daily suspension duration is about 1.5 hours, and the number of days without sufficient water services is around 4 per year.
• Telecommunications: The quality of telecommunications services does not show a significant impact on business costs, possibly due to its lower variability and less direct effect on operational activities compared to electricity and water.
• Economic Impact: Eliminating electricity outages could save between 4% and 7% of firms' operating costs. In terms of GDP, eliminating existing electricity outages could bring total economic benefits ranging from 0.5% to 6%, while removing water suspensions could result in a gain of about 0.5% to 2% of GDP.
• Regional Differences: The ECA region generally has better infrastructure quality than South Asia and Sub-Saharan Africa. However, there is still significant variation in service quality within the region, with Albania showing the poorest infrastructure quality in terms of electricity and water supply.

Key Dimensions of Service Quality

• Frequency of Service Interruptions: Measured as the number of days without sufficient services per year.
• Duration of Service Interruptions: Measured as the average number of hours of service suspension per day.

Methodology

• Empirical Model: A seemingly unrelated regression (SUR) technique is used to estimate the cost function, incorporating both output and input prices.

• Cost Function: The cost function is defined as:

  $$
  \ln C = \beta_0 + \beta_Y \ln Y + \frac{1}{2} \beta_{YY} \ln Y \ln Y + \sum_i \beta_{W_i} \ln W_i + \frac{1}{2} \sum_i \sum_j \beta_{W_i W_j} \ln W_i \ln W_j + \sum_i \beta_{Y W_i} \ln Y \ln W_i + \beta_Z \ln Z + \frac{1}{2} \beta_{ZZ} \ln Z \ln Z + \beta_{YZ} \ln Y \ln Z + \sum_i \beta_{W_i Z} \ln W_i \ln Z + \varepsilon
  $$

• Factor Share Equations: Derived from the Shephard's lemma, these equations help quantify the cost share of each input, including infrastructure quality.

Policy Implications

• Public Investment: The study underscores the importance of public infrastructure investment, particularly in improving the reliability of electricity and water supply.
• Sectoral Differences: Different sectors are affected differently by infrastructure quality. For example, the mining and manufacturing sectors are more costly, while trade and real estate are less costly.
• Heterogeneity in Service Quality: There is significant variation in the quality of infrastructure services received by firms within the same country, emphasizing the need for targeted improvements.
• Objective Indicators: The paper uses objective indicators of infrastructure quality, such as the number of days with outages and average duration of suspensions, to provide more accurate assessments compared to subjective ones.

Conclusion

Improving infrastructure quality, especially in electricity and water supply, can lead to substantial cost reductions for firms and overall economic benefits. The paper highlights the necessity of considering firm-level heterogeneity in infrastructure service quality and suggests that public investment should be prioritized in areas where service interruptions are most prevalent. The findings are crucial for policymakers aiming to enhance economic growth through improved infrastructure services.