Electrification to Grow Manufacturing? Evidence from Mini-Grids in Nepal


Firms in developing countries often identify electricity as a major constraint to operations. Decentralized renewable energy sources could help alleviate these constraints. We investigate whether electrification in Nepal – via microhydro plants and their mini-grids – helped grow the manufacturing sector. Mini-grids significantly increased manufacturing establishments; yet their overall presence remained limited due to low baseline numbers. Following electrification, females and males were more likely to be employees and less likely to be self-employed. Likewise, usual employment activities shifted from labor in agriculture to salary and wage work. In more remote locations, the impacts of mini-grids on manufacturing establishments and labor were significantly muted.

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Zhenxuan Wang
Zhenxuan Wang

My research interests lie at the intersection of environmental and energy economics, climate policy, development economics, and public economics.