%0 Journal Article %A Getahun, Tigabu Degu %A Villanger, Espen %D 2018 %T Active Private Sector Development Policies Revisited: Impacts of the Ethiopian Industrial Cluster Policy %U https://tandf.figshare.com/articles/journal_contribution/Active_Private_Sector_Development_Policies_Revisited_Impacts_of_the_Ethiopian_Industrial_Cluster_Policy/5972062 %R 10.6084/m9.figshare.5972062.v1 %2 https://tandf.figshare.com/ndownloader/files/10710265 %K Sector Development Policies Revisited %K increase firm growth %K analyse impacts %K cluster policy %K comparison group %K transaction costs %K government-created cluster %K knowledge networks %K Ethiopian Industrial Cluster Policy %K difference in-difference estimation %K firm performance %K production facilities %K maximising agglomeration benefits %K market information %X

We analyse impacts of a cluster policy aiming to increase firm growth through maximising agglomeration benefits and improving production facilities. Firms located in a natural cluster were incentivised to move to a new government-created cluster. A limited number of firms were allowed to move, and many similar firms, also eager to move but could not, formed our comparison group. Controlling for selection, and employing difference in-difference estimation, we find large negative effects on job-creation and firm performance. The policy hampered the firms’ business and knowledge networks, reduced trust among firms, increased transaction costs and curbed market information.

%I Taylor & Francis