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Electrification and economic growth: Evidence from china's rural primary electrification program

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  • Lin, Youhong
  • Xu, Chunhua

Abstract

China implemented the Rural Primary Electrification Program in the 1980s and 1990s with the aim of accelerating rural electrification through the use of small hydropower. This study delves into the economic impact of this program, shedding light on the role of rural electrification in China's development. Using a difference-in-differences model, we find that after the completion of the electrification program, the GDP per capita of the pilot counties increased by an additional 5.3% compared with that of the counties that would be included in the program later. The program primarily boosted the secondary industry, with less pronounced effects on primary and tertiary sectors. Moreover, the program promoted economic growth more significantly in hilly areas with abundant hydropower resources and labor resources. In addition, using nighttime light data, we find that the electrification program illuminated dark areas without light. Finally, the effect of the electrification program on township and village enterprises was an important channel through which electrification promoted economic growth.

Suggested Citation

  • Lin, Youhong & Xu, Chunhua, 2024. "Electrification and economic growth: Evidence from china's rural primary electrification program," China Economic Review, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:chieco:v:83:y:2024:i:c:s1043951x23001694
    DOI: 10.1016/j.chieco.2023.102084
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    More about this item

    Keywords

    Electrification; Small hydropower; Economic growth;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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