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Working Paper

Firms’ Locational Choice and Infrastructure Development in Rwanda

SANITATION BUSINESS ACTIVITIES PRODUCTION FOSSIL FUELS LAGS GLOBAL MARKETS GLOBAL COMPETITIVENESS TRANSPORT INFRASTRUCTURE CONSUMER GOODS INFORMATION EXPORTS ELASTICITY INFRASTRUCTURE DEVELOPMENT POLITICAL ECONOMY MANUFACTURERS AGGLOMERATION BENEFITS COMPANIES INDUSTRIAL DEVELOPMENT PUBLIC INFRASTRUCTURE VARIABLES FIRM SIZE TAX INDUSTRIAL DEVELOPMENTS OPEN ACCESS ECONOMIC ACTIVITY DEVELOPMENT COMMUNICATIONS CHOICE DATA INTERNATIONAL COMPETITIVENESS INFRASTRUCTURE ACCESS ROAD SOCIAL SERVICE COSTS ROAD NETWORK TRANSPORT GROWTH PATH ECONOMETRICS PRODUCTIVITY EXTERNALITIES INDUSTRIALIZATION INCREASING RETURNS CRITERIA MARKETS FIRM PRIVATE INVESTMENT CONNECTIVITY WEB SERVICE PROVISION ENTERPRISES RAIL STATIONS SOCIAL DEVELOPMENT PHYSICAL DISTANCE FUELS INFRASTRUCTURE MANUFACTURING PHONE TRANSACTION INVESTORS RELIABILITY FIRMS WAGES POLICIES ECONOMETRIC ANALYSIS RESULTS NESTED LOGIT MODEL VALUE MOBILE PHONE ROAD USE COMMUNICATIONS TECHNOLOGIES COMPETITIVENESS FOREIGN DIRECT INVESTMENT ELECTRICITY ELASTICITIES ACCESSIBILITY AGRICULTURE INFRASTRUCTURE DEVELOPMENTS MARKET GOOD TRANSPORT DIVERSIFICATION ROADS PORT FACILITIES RESULT ECONOMIC DEVELOPMENT TRADE ICT GOODS INTERNATIONAL MARKET BUSINESSES BUSINESS INVESTMENT NETWORK AGGLOMERATION ECONOMIES POSITIVE EXTERNALITIES BUSINESS ENVIRONMENT RAIL MARKET DEMAND POLICY SUPPORT PRIVATE INVESTORS ECONOMIC ACTIVITIES FOREIGN COMPANIES INVESTMENTS PORT ACCESS CUSTOMERS ECONOMIC GEOGRAPHY TRANSPORT COSTS TECHNOLOGIES SEE COMMODITY INTERNATIONAL MARKETS LARGE ENTERPRISES SIZE OF FIRM PRICES USES DEVELOPMENT POLICY
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World Bank, Washington, DC
Africa | Rwanda
2015-07-14T21:01:33Z | 2015-07-14T21:01:33Z | 2015-06

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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