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Road Infrastructure and Enterprise Dynamics in Ethiopia

Author

Listed:
  • Admasu Shiferaw

    (Department of Economics, The College of William and Mary)

  • Måns Söderbom

    (Economics Department, University of Gothenburg, Sweden)

  • Eyersusalem Siba

    (Economics Department, University of Gothenburg, Sweden)

  • Getnet Alemu

    (College of Development Studies, Addis Ababa University, Ethiopia)

Abstract

This 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.

Suggested Citation

  • Admasu Shiferaw & Måns Söderbom & Eyersusalem Siba & Getnet Alemu, 2013. "Road Infrastructure and Enterprise Dynamics in Ethiopia," Working Papers 129, Department of Economics, College of William and Mary.
    • Handle: RePEc:cwm:wpaper:129
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    File URL: http://economics.wm.edu/wp/cwm_wp129.pdf
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    References listed on IDEAS

    as
    1. Sam Jones & John Page & Abebe Shimeles & Finn Tarp & John Page & Måns Söderbom, 2015. "Is Small Beautiful? Small Enterprise, Aid and Employment in Africa," African Development Review, African Development Bank, vol. 27(S1), pages 44-55, October.
    2. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    3. Rainer Winkelmann, 2008. "Econometric Analysis of Count Data," Springer Books, Springer, edition 0, number 978-3-540-78389-3, December.
    4. Rémi Jedwab & Alexandre Moradi, 2011. "Transportation Infrastructure and Development in Ghana," PSE Working Papers halshs-00607207, HAL.
    5. Naude, Wim & Matthee, Marianne, 2007. "The Significance of Transport Costs in Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    6. repec:unu:wpaper:wp2012-94 is not listed on IDEAS
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    More about this item

    Keywords

    Road infrastructure; Firm Entry; Location Choice; Startup-Size; Ethiopian Manufacturing;
    All these keywords.

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