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How does energy matter? Rural electrification, entrepreneurship, and community development in Kenya

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  • Vernet, Antoine
  • Khayesi, Jane N.O.
  • George, Vivian
  • George, Gerard
  • Bahaj, Abubakar S.

Abstract

We examine the impact of rural electrification on individuals and businesses within a community in order to test a resource-based theory of entrepreneurship. We show that access to electricity increases average households’ income and entrepreneurial activities. The impact of electricity on entrepreneurial activity has wide-ranging implications for development policy in countries where access to electricity is sparse. Results show a significant difference in entrepreneurial opportunities with respect to firm formation, with the electrified site reporting more new micro-enterprises (33) than the control site (20) after implementation. Electrification affects both households’ income, individuals’ perceptions of their social position, and opportunities for business development. Individuals’ future expectations and entrepreneurial activities are enhanced in the community that receives electricity. We also find evidence that women-led households benefit from electrification more than men-led ones, but this benefit does not eliminate the difference in income between women and men-led household. We discuss implications of the study for entrepreneurship and community social development interventions.

Suggested Citation

  • Vernet, Antoine & Khayesi, Jane N.O. & George, Vivian & George, Gerard & Bahaj, Abubakar S., 2019. "How does energy matter? Rural electrification, entrepreneurship, and community development in Kenya," Energy Policy, Elsevier, vol. 126(C), pages 88-98.
    • Handle: RePEc:eee:enepol:v:126:y:2019:i:c:p:88-98
    DOI: 10.1016/j.enpol.2018.11.012
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    3. Zapata, Oscar, 2022. "Renewable Energy and Community Development," OSF Preprints tk59y, Center for Open Science.
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    8. Agnieszka Kurdys-Kujawska & Agnieszka Sompolska-Rzechula, 2020. "Subsidization of Entrepreneurship in Rural Areas in Poland: Scale, Effects and Regional Diversity," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 246-263.
    9. Pradhan Shrestha, Rosy & Jirakiattikul, Sopin & Lohani, Sunil Prasad & Shrestha, Mandip, 2023. "Perceived impact of electricity on productive end use and its reality: Transition from electricity to income for rural Nepalese women," Energy Policy, Elsevier, vol. 183(C).
    10. Bach Nguyen & Nguyen Phuc Canh & Su Dinh Thanh, 2021. "Institutions, Human Capital and Entrepreneurship Density," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(3), pages 1270-1293, September.
    11. Canh Phuc Nguyen & Sangho Kim & Thanh Dinh Su, 2022. "The Nonlinear Relationship Between Entrepreneurship and Natural Resource Rents," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 31(3), pages 632-662, November.
    12. Bach Nguyen & Christophe Schinckus & Nguyen Phuc Canh & Su Dinh Thanh, 2021. "Economic Policy Uncertainty and Entrepreneurship: A Bad for a Good?," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 30(1), pages 81-133, March.
    13. AbuBakr Bahaj & Luke Blunden & Christopher Kanani & Patrick James & Isaac Kiva & Zoë Matthews & Heather Price & Hildah Essendi & Jane Falkingham & Gerard George, 2019. "The Impact of an Electrical Mini-grid on the Development of a Rural Community in Kenya," Energies, MDPI, vol. 12(5), pages 1-21, February.
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