Electricity Access and Structural Transformation : Evidence from Brazil's Electrification
This study proposes a novel supply-side mechanism driving economic structural transformation: grid electrification. Increasing electricity availability affects the reallocation of inputs to more productive activities through generating higher retur...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/728811584105259025/Electricity-Access-and-Structural-Transformation-Evidence-from-Brazils-Electrification http://hdl.handle.net/10986/33442 |
| Summary: | This study proposes a novel supply-side
mechanism driving economic structural transformation: grid
electrification. Increasing electricity availability affects
the reallocation of inputs to more productive activities
through generating higher returns and lowering entry costs
in sectors with greater infrastructure intensity. The
results of modeling and econometric analysis based on
Brazil's historical data over the period 1970-2006
confirm that the manufacturing sector benefits the most in
these two dimensions, followed by services and agriculture.
The expansion of electricity infrastructure explains about
17 percent of this process and 32 percent of the observed
increase in GDP per capita. Simulations of a multisector
neoclassical growth model with heterogeneous firms help
assessing the effectiveness of different electrification policies. |
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