The Impact of Rural Electrification on Business Enterprise Creation: Panel Data Evidence from Ethiopia

Sied Hassan () and Amare Fentie ()
Additional contact information
Sied Hassan: World Bank, Washington, DC, and Environment and Climate Research Center, Ethiopian Development Research Institute, Addis Ababa
Amare Fentie: Environment and Climate Research Center

No 22-4, EfD Discussion Paper from Environment for Development, University of Gothenburg

Abstract: The creation of non-agricultural business enterprises is one of the multiple potential benefits of creating access to electricity in rural areas. This study investigates whether access to grid electricity helps rural households open business enterprises in Ethiopia. Using a differencein-difference approach, our results imply that access to grid electricity does not have significant impact in the short run; however, in the long run, it increased rural households’ opening of businesses by 5%. Off-grid electricity access through low-powered technologies such as solar lanterns has insignificant impacts in both the short and long run. Robustness and falsification tests are conducted to check the validity of our results. This has implications for the country’s Growth and Transformation Plan, which aspires to transform the country’s agriculture dominated economy into an industrial economy.

Keywords: non-agricultural business; electrification; rural Ethiopia; panel data (search for similar items in EconPapers)
JEL-codes: D00 D22 Q40 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2022-03-23
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.efdinitiative.org/sites/default/files/ ... %2022-04%20final.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunefd:2022_004

Access Statistics for this paper

More papers in EfD Discussion Paper from Environment for Development, University of Gothenburg
Bibliographic data for series maintained by Franklin Amuakwa-Mensah ().