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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

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    1. Page, John & Soderbom, Måns, 2012. "Is Small Beautiful? Small Enterprise, Aid and Employment in Africa," WIDER Working Paper Series 094, World Institute for Development Economic Research (UNU-WIDER).
    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, January.
    3. 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).
    4. repec:unu:wpaper:wp2012-94 is not listed on IDEAS
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    Cited by:

    1. repec:eee:wdevel:v:96:y:2017:i:c:p:198-215 is not listed on IDEAS
    2. Eric Strobl & Marie-Anne Valfort, 2015. "The Effect of Weather-Induced Internal Migration on Local Labor Markets. Evidence from Uganda," World Bank Economic Review, World Bank Group, vol. 29(2), pages 385-412.
    3. Rajesh SN Raj & Kunal Sen, 2016. "Moving out of the bottom of the economy? Constraints to firm transition in the Indian informal manufacturing sector," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.
    4. Moller,Lars Christian & Wacker,Konstantin M., 2015. "Ethiopia?s growth acceleration and how to sustain it?insights from a cross-country regression model," Policy Research Working Paper Series 7292, The World Bank.
    5. Remi Jedwab & Adam Storeygard, "undated". "Economic and Political Factors in Infrastructure Investment: Evidence from Railroads and Roads in Africa 1960–2015," Working Papers 2017-3, The George Washington University, Institute for International Economic Policy.
    6. repec:eee:wdevel:v:97:y:2017:i:c:p:178-198 is not listed on IDEAS
    7. Admasu Shiferaw, 2016. "Constraints to Private Investment in a High-Growth Environment: Firm-level Evidence from Ethiopia," Working Papers 168, Department of Economics, College of William and Mary.

    More about this item

    Keywords

    Road infrastructure; Firm Entry; Location Choice; Startup-Size; Ethiopian Manufacturing;

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