Firms’ Locational Choice and Infrastructure Development in Rwanda
Agglomeration economies are among the most important factors to increase firm productivity. However, there is little evidence supportive of this in Africa. By applying the conditional and nested logit models, this paper examines the relationship be...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/06/24570548/firms’-locational-choice-infrastructure-development-rwanda http://hdl.handle.net/10986/22153 |
| Summary: | Agglomeration economies are among the
most important factors to increase firm productivity.
However, there is little evidence supportive of this in
Africa. By applying the conditional and nested logit models,
this paper examines the relationship between firm locations
and infrastructure accessibility in Rwanda. It is found that
agglomeration economies matter to even one of the smallest
countries in Africa. It is also found that infrastructure
availability has an important role in affecting the firm
location decision. Electricity access and transport
connectivity to the domestic and international markets are
found to be important to attract new investment. In
addition, the quality of local labor supplied, measured by
educational attainment, is found as an important determinant
of firm location, while the effect of labor costs remains inconclusive. |
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