ABSTRACT Electricity unreliability remains a persistent constraint on firm operations across Africa, inducing widespread reliance on private diesel generators as a resilience strategy. While such adaptation is often interpreted as evidence of firm resilience, its implications for productivity and environmental sustainability remain unclear. Despite extensive research on electricity outages and firm performance, limited attention has been given to the environmental consequences of firm‐level coping strategies. This study addresses this gap by introducing the concept of a “dirty resilience trap,” thereby clarifying its novelty and contribution. Using firm‐level data from the World Bank Enterprise Surveys combined with country‐level environmental indicators for 47 African countries over the period 2006–2020, the study employs fixed‐effects estimation, lagged models, interaction terms, and threshold analysis based on electricity unreliability regimes. The findings show that electricity unreliability significantly increases generator ownership and self‐generation intensity, confirming generators as a rational coping response. However, generator dependence does not improve capacity utilization, indicating resilience without productivity gains. While average effects on CO 2 emissions, PM2.5 exposure, and energy intensity are insignificant, this masks strong heterogeneity across infrastructure conditions, as threshold results reveal regime‐specific environmental impacts. By explicitly distinguishing its contribution from prior outage‐performance studies and incorporating the analysis period, the study demonstrates that generator dependence represents a context‐dependent equilibrium with long‐term environmental costs. These results highlight how infrastructure reliability shapes the sustainability consequences of firm adaptation in developing economies.
Yuan et al. (Sun,) studied this question.