Modelling firm export intensity under electricity infrastructural constraints in Nigeria: a fractional logit approach
DOI:
https://doi.org/10.33003/fujafr-2026.v4i1.288.373-389Keywords:
Fractional logit, Export intensity, Electricity infrastructure, Firms, NigeriaAbstract
Purpose: This study examines the effect of electricity infrastructure constraints on the export intensity of firms in Nigeria. It aims to determine how both operational disruptions and economic losses associated with unreliable electricity supply influence firms’ ability to compete and scale in the global market within the broader context of export-led economic diversification and industrial growth.
Methodology: The study employs a fractional logit estimation technique to analyse firm-level data obtained from the World Bank Enterprise Survey (2025) covering Nigerian firms across various industries. Key control variables incorporated into the model include firm size, firm age, access to finance, and foreign ownership, as well as industry-specific and regional heterogeneity, ensuring robustness in the estimation.
Results and conclusion: The findings reveal that electricity constraints exert a statistically significant negative effect on export intensity. Specifically, operational constraints show coefficients ranging from -0.297 to -0.354, while economic constraints measured as the percentage of sales lost due to power outages range from -0.721 to -0.894, indicating a stronger adverse impact. The study concludes that unreliable electricity supply significantly undermines firms’ export performance in Nigeria, with economic losses being particularly detrimental.
Implication of findings: The results underscore the critical need for comprehensive electricity sector reforms aimed at improving reliability and reducing outage-related costs. In addition, complementary policies should be implemented to support firm expansion, attract export-orientated foreign direct investment, and improve access to long-term, affordable export financing. These measures are essential to enhance export competitiveness, promote industrial growth, and achieve sustainable economic diversification in Nigeria.
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