Electricity Productivity in Socio-Economic Context: A Country-Level Analysis

Abstract

Electricity is one of the most ubiquitous kinds of energy, and electricity production has expanded throughout the years. Furthermore, there is a lack of research into whether significant differences in factors determine electricity productivity across different regions. Our research paper focuses on identifying the core drivers of electricity productivity, by analyzing information and data from different countries and regions for the period 2009–2018. A cross-sectional (2018) multiple linear regression and a panel data analysis based on various reputable databases such as World Bank and United Nations Development Programme were conducted for the period 2009 - 2018. Cross-sectional results showed an adjusted R-squared value of 0.77, with a 0.01 unit increase in the Inequality factor causing a 1.32% decrease in Electricity Productivity. Concerning Panel Data, the R-squared values were 0.762 (pooled OLS), 0.769 (Fixed Effects), and with OLS regression increase of 0,1 unit in Institutional Environment factor leading to an increase in Electricity Productivity of 8% whereas, in Fixed effects, an increase by 1 unit in the same factor would lead to an increase of 24% in Electricity Productivity. Regardless of the methods used, Institutional environment, Urbanization, and Natural resource rents all positively affect Electricity Productivity. Further research could include exploring the real effect of natural resource rents on Electricity Productivity.