Humphrey, Richard MartinIimi, AtsushiMelibaeva, Sevara2015-07-142015-07-142015-06https://hdl.handle.net/10986/22152Infrastructure is an important driving force for economic growth. It reduces trade and transaction costs and stimulates the productivity of the economy. Africa has been lagging behind in the global manufacturing market. Among others, infrastructure is an important constraint in many African countries. Using firm-level data for East Africa, the paper reexamines the relationship between firm performance and infrastructure. It is shown that labor costs are by far the most important to stimulate firm production. Among the infrastructure sectors, electricity costs have the highest output elasticity, followed by transport costs. In addition, the paper shows that the quality of infrastructure is important to increase firm production. In particular, quality transport infrastructure seems to be essential. The paper also finds that agglomeration economies can reduce firm costs. The agglomeration elasticity is estimated at 0.03–0.04.en-USCC BY 3.0 IGOTARIFFSVEHICLE OPERATING COSTSWATER SERVICESTRANSPORT SECTOREQUIPMENTECONOMIC GROWTHINFRASTRUCTURE SERVICESPRODUCTIONPRICE ELASTICITY OF DEMANDTRANSPORT INFRASTRUCTUREGENERATIONELASTICITY OF DEMANDQUALITY OF TRANSPORTELASTICITYPRODUCTION INCREASESINFRASTRUCTURE DEVELOPMENTPOLITICAL ECONOMYPUBLIC INFRASTRUCTUREVARIABLESROAD INFRASTRUCTURECOMPUTER PROGRAMPRICEINPUTSRETURNS TO SCALEGENERATORSCOMPUTERHIGHWAY INVESTMENTOPEN ACCESSTRANSPORT MODESCOMMUNICATIONSMATHEMATICAL ECONOMICSINSTITUTIONSVEHICLEGENERATION CAPACITYDATAINTERNATIONAL BUSINESSESROADCOSTSTRANSPORTECONOMETRICSPRODUCTIVITYEXTERNALITIESHIGHWAY CONGESTIONINDUSTRIALIZATIONFAILURESFINANCIAL INSTITUTIONSBUSINESS SERVICESELECTRICITY SUPPLYWEBASSET REPLACEMENTTOTAL COSTSMATERIALPRICE ELASTICITYPORTSINVENTORYECONOMIC RESEARCHPRODUCTION INPUTSTELEPHONEINFRASTRUCTUREINFRASTRUCTURE INVESTMENTMANUFACTURINGTECHNOLOGYTRANSACTIONCONGESTIONDRIVINGTRANSPORTATIONWAGESINTERNATIONAL TRADEELECTRIC POWERINFRASTRUCTURE COSTSPRICE ELASTICITIESRESULTSCOMPETITIVENESSPOWERFACTOR DEMANDELECTRICITYPRODUCTION FUNCTIONSELASTICITIESLOCALIZATIONINEFFICIENCYELECTRICITY GENERATIONAGRICULTUREDAYS OF INVENTORYMEASUREMENTTRANSACTION COSTSECONOMIC ORDERHIGHWAYSPRODUCTION FUNCTIONHIGHWAY INFRASTRUCTUREROADSCOMPARATIVE ECONOMICSINFRASTRUCTURE INVESTMENTSRESULTHIGHWAYTRADEICTGDPGOODSTHEORYBACK-UPECONOMIES OF SCALEBUSINESSESBUSINESSNETWORKAGGLOMERATION ECONOMIESPOSITIVE EXTERNALITIESINTERNATIONAL ENERGYPERFORMANCEBUSINESS ENVIRONMENTFUELINVESTMENTSCOMMUNICATIONWATER INFRASTRUCTUREDATABASETRANSPORT COSTSPROFITSRENTAL FEESROAD TRANSPORTVEHICLE OPERATINGCOMMODITYPOSITIVE EFFECTSFUEL COSTFREIGHTAGGLOMERATIONPRICESUSESAGGLOMERATION EFFECTSPRODUCTION COSTSDEVELOPMENT POLICYWorking PaperWorld Bank10.1596/1813-9450-7278