This study argues that public infrastructure is an important though previously neglected driving mechanism of the structural transformation process. To assess its significance quantitatively, this study first develops a multisector neoclassical growth model with heterogeneous firms, where public...

This study proposes a novel supply-side mechanism driving economic structural transformation: grid electrification. Increasing electricity availability affects the reallocation of inputs to more productive activities through generating higher returns and lowering entry costs in sectors with...