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The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia

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Abstract

There is growing interest in the rural non-farm sector in developing countries as a contributor to economic growth, employment generation, livelihood diversification and poverty reduction. Access to infrastructure is identified in some studies as a factor that affects non-farm rural employment and income but less attention has been paid to the constraints imposed by poor quality infrastructure. In this paper we use data from 4000 households in rural Indonesia to show that the quality of two key types of infrastructure – roads and electricity – affects both employment in and income from non-farm enterprises. It appears that there would be gains from development strategies that improve both the access to and the quality of rural infrastructure.

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  • John Gibson & Susan Olivia, 2008. "The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia," Working Papers in Economics 08/17, University of Waikato.
  • Handle: RePEc:wai:econwp:08/17
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    1. repec:eee:wdevel:v:96:y:2017:i:c:p:198-215 is not listed on IDEAS
    2. repec:eee:pubeco:v:152:y:2017:i:c:p:119-132 is not listed on IDEAS
    3. Lenz, Luciane & Munyehirwe, Anicet & Peters, Jörg & Sievert, Maximiliane, 2017. "Does Large-Scale Infrastructure Investment Alleviate Poverty? Impacts of Rwanda’s Electricity Access Roll-Out Program," World Development, Elsevier, vol. 89(C), pages 88-110.
    4. Nguyen, Huy, 2014. "The effect of land fragmentation on labor allocation and the economic diversity of farm households: The case of Vietnam," MPRA Paper 57643, University Library of Munich, Germany.
    5. Lindy Charlery & Martin R. Nielsen & Henrik Meilby & Carsten Smith-Hall, 2016. "Effects of New Roads on Environmental Resource Use in the Central Himalaya," Sustainability, MDPI, Open Access Journal, vol. 8(4), pages 1-20, April.
    6. Oktarina, Sachnaz Desta & Furuya, Jun, 2015. "Economic Evaluation of Poverty Alleviation by the National Program for Community Empowerment in Western Part of Rural Indonesia," Japanese Journal of Rural Economics, Agricultural Economics Society of Japan (AESJ), vol. 17.
    7. Veldhuis, A.J. & Reinders, A.H.M.E., 2015. "Reviewing the potential and cost-effectiveness of off-grid PV systems in Indonesia on a provincial level," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 757-769.
    8. Stephan Klasen & Jan Priebe & Robert Rudolf, 2013. "Cash crop choice and income dynamics in rural areas: evidence for post-crisis Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 44(3), pages 349-364, May.
    9. Rodríguez-Pose, Andrés & Hardy, Daniel, 2015. "Addressing poverty and inequality in the rural economy from a global perspective," LSE Research Online Documents on Economics 63257, London School of Economics and Political Science, LSE Library.
    10. Aditi Bhattacharyya & Daisy Das & Arkadipta Ghosh, 2017. "Electrification and Welfare of Poor Households in Rural India," Working Papers 1702, Sam Houston State University, Department of Economics and International Business.
    11. Shi, Hao & Huang, Shaoqing, 2014. "How Much Infrastructure Is Too Much? A New Approach and Evidence from China," World Development, Elsevier, vol. 56(C), pages 272-286.
    12. Comello, Stephen D. & Reichelstein, Stefan J. & Sahoo, Anshuman & Schmidt, Tobias S., 2017. "Enabling Mini-Grid Development in Rural India," World Development, Elsevier, vol. 93(C), pages 94-107.
    13. Yamauchi, Futoshi, 2014. "Roads, labor markets, and human capital : evidence from rural Indonesia," Policy Research Working Paper Series 7139, The World Bank.
    14. Olivia, Susan & Gibson, John, 2013. "Economic Rise and Decline in Indonesia – As Seen from Space," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151210, Agricultural and Applied Economics Association.
    15. repec:gam:jsusta:v:8:y:2016:i:4:p:363:d:68149 is not listed on IDEAS
    16. repec:wbk:wbpubs:28971 is not listed on IDEAS
    17. repec:eee:jfpoli:v:75:y:2018:i:c:p:37-51 is not listed on IDEAS
    18. Rao, Narasimha D., 2013. "Does (better) electricity supply increase household enterprise income in India?," Energy Policy, Elsevier, vol. 57(C), pages 532-541.

    More about this item

    Keywords

    infrastructure; non-farm rural economy; Indonesia;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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