Energy constraints and firm survival: the case of developing country

This study investigates strategies to enhance firms’ resilience to energy resource limitations, drawing on survey data from 2005–2015 from Vietnam’s micro, small, and medium enterprises (MSMEs). We analysed how energy constraints (ECs) affect firm survival, considering internal factors like firm size and export status, alongside external institutional constraints. Using the semi-parametric Cox proportional hazard model and two parametric models (Weibull and exponential), our findings indicate that ECs significantly reduce firm survival prospects through the productivity channel. Propensity score matching-difference in differences further confirmed this relationship, highlighting a stronger impact in environments with limited institutional support. Additionally, our results suggest that internal firm capacities play a vital role in lessening the negative effects of ECs. This research offers meaningful insights for economists and policymakers aiming to develop strategies that strengthen firms’ ability to cope with energy shortages, supporting sustained growth despite energy challenges.