The decision of a firm to have its financial accounts externally audited is associated with a higher probability of better access to energy. Our results show that the integrity of financial information is a robust predictor of firm's access to energy. We analyze the impact of financial information integrity on firms' access to energy in 138 developing countries. We argue that energy access is both a technical and an economic issue, and hence the integrity of firms' financial information is a key monitoring mechanism.
JEL classification: Q49 M40 O16 G20 There are strong international pressures on developing countries to achieve the universal energy access 2030 goal and to establish stricter monitoring mechanisms of firms' financial information to attract energy investment. In addition to the world wide analysis, the paper presents an analysis by regions Some of the most severe perceived impediments to doing business affect firms of all sizes, and consequently call for across-the-board policy improvements. Thus these impediments should be prime targets for policies directed at leveling the playing field. In particular, smaller firms face significantly more problems than larger firms with financing, taxes and regulations, inflation, corruption and street crime. Overall (that is, for the world sample) small firms report more problems than medium-sized firms, which in turn report more problems than large firms. The main finding is that there is indeed a bias against small firms. This paper draws on a new private sector survey covering 80 countries and one territory to study the question whether business obstacles are related to firm size. For instance, they may be less affected by excessive regulations because they can more easily slip into informal arrangements. In theory, however, smaller firms may also have advantages over larger firms.
Those who seek to develop the sector must consent with the general perception that small- and medium-scale enterprises are at a disadvantage compared with larger firms. The development of the small and medium enterprise sector is believed to be crucial for economic growth and poverty alleviation.
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