Road Infrastructure and Enterprise Dynamics in Ethiopia
AbstractThis paper investigates firm level responses to a large scale public investment program on road infrastructure in Ethiopia during 1997 to 2010. Firms' location choices and average start-up size are examined by combining town level panel data on road accessibility with a panel of manufacturing firms for the period 1996 to 2009. We find econometric results showing that better road access increases a town's attractiveness for manufacturing firms. While towns with initially large number of firms continue to attract more firms, there has been a tendency toward convergence in the distribution of firms, reducing their geographic concentration. Average startup size in isolated locations is also smaller relative to firms entering well connected markets in terms of road access. We conclude that improved road infrastructure has a favorable impact on the entry patterns and structure of the manufacturing sector in Ethiopia.
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Bibliographic InfoPaper provided by Department of Economics, College of William and Mary in its series Working Papers with number 129.
Length: 42 pages
Date of creation: 10 Mar 2013
Date of revision:
Road infrastructure; Firm Entry; Location Choice; Startup-Size; Ethiopian Manufacturing;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-23 (All new papers)
- NEP-DEV-2013-03-23 (Development)
- NEP-TRE-2013-03-23 (Transport Economics)
- NEP-URE-2013-03-23 (Urban & Real Estate Economics)
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