Infrastructure Complementarities and Local Economic Growth : Evidence from Electrification and Highway Construction in Brazil

This paper uses four decades of panel data on Brazilian municipalities to study the separate and joint impacts of highway and electricity infrastructure access on local economic outcomes. The identification strategy employs difference-in-difference estimators with staggered adoption design and several treatments. The results show strong contemporaneous effects of electrifying municipalities that already have access to a highway, whereas electrification or highway provision alone may, at best, have no effect. Infrastructure investments also facilitated long-lasting structural transformation effects, with both types of infrastructure access spurring growth of the industrial output share