Ruhr Economic Papers

RWI, 06/2010, 35 S./p., 8 Euro, ISBN 978-3-86788-213-2

Abstract

Productive electricity use is widely believed to contribute to positive impacts of electrification projects. This paper investigates these impacts by comparing the performance of micro manufacturing enterprises in grid-covered and non-covered villages in Northern Benin. Using firm-level data, the empirical analysis employs a Propensity Score Matching. While beneficial impacts are found from firm creation after electrification, firms that existed before actually show a non-significantly inferior performance to their matched counterparts from a non-electrified region. Complementary measures that sensitize firms about the implications of a grid connection are recommended as important features of program design.