Bilateral exports and industrialization in Sub-Saharan African countries: Does electricity access matter?
The role of electricity on export-industrilization nexus
DOI:
https://doi.org/10.15173/esr.v28i2.5923Abstract
African countries are characterised by electricity shortages, which is an impediment not only for its industrialisation process but also for its international competitiveness. The aim of this study is to examine the role of electricity access on the link between industrialisation and bilateral exports. The gravity model was used on 33 SSA countries over the period 2000-2020. The pseudo Poisson maximum likelihood findings with high-dimensional fixed effects estimates showed that industrialisation and access to electricity promote bilateral exports in SSA countries. By using disaggregated electricity data, the results revealed that only urban access to electricity has a significant positive effect on bilateral exports. Finally, the mediation analysis highlighted that urban access to electricity has a significant mediating effect on the industrialisation-intra-African exports relationship. SSA countries need to invest more in electricity infrastructure, not only to make up the current shortfall but also to leverage the full benefits of globalisation.
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