Template-type: ReDIF-Paper 1.0
Author-Name: Elena Perra,      
Author-Email: elena.perra@unifi.it 
Author-Name: Sanfilippo, Marco  
Author-Email: marco.sanfilippo@unito.it 
Author-Name: Sundaram, Asha 
Author-Email: a.sundaram@auckland.ac.nz
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: Roads, Competition, and the Informal Sector.
Abstract: We examine the impact of competition from better connectivity to domestic markets on formal
and informal firms. Combining geolocalized information on road improvements under a large
infrastructure investment programme with data on manufacturing firms in Ethiopia, we show
that an increase in competition is associated with higher labour productivity, capital-intensity,
investment in physical capital and wages in the formal sector. On the contrary, there is no
associated increase in labour productivity or wages in the informal sector. In fact, increased
competition results in lower capital-intensity and investment, a shift in composition towards
workers without primary education and a lower likelihood of operating in the informal sector.
We thus highlight that the benefits of infrastructure improvement programmes may not accrue
uniformly in the economy.
Length: pages 43
Creation-Date: 2022-12
File-URL: https://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2022dip/wp_21_2022.pdf
File-Format: Application/PDF
Handle: RePEc:uto:dipeco:202221