Energy poverty and entrepreneurship: evidence from sub-Saharan Africa
Blaise Ondoua Beyene, Georges Ngnouwal Eloundou, Jose Claude Mokompea Nyamou, Camal Gallouj
Abstract
Purpose Energy poverty is a major obstacle to economic and social development in sub-Saharan Africa (SSA), where over 600 million people lack access to electricity. This situation stifles entrepreneurship, particularly in rural areas with non-existent energy infrastructure. This paper aims to examine the direct, indirect and nonlinear effects of energy poverty on entrepreneurship in SSA. Design/methodology/approach Using data from 36 SSA countries (2007–2020), static panel data models were estimated with generalised least squares and Driscoll–Kraay methods to address cross-sectional dependence and heteroskedasticity. Findings The results reveal that reducing energy poverty significantly increases new business creation density. This effect remains robust across various estimation techniques. Indirectly, alleviating energy poverty enhances entrepreneurship by improving internet access and health outcomes. Research limitations/implications The analysis is limited to data up to 2020 and focuses on SSA, potentially limiting generalisability. The findings theoretically support the idea that reducing energy poverty can stimulate entrepreneurship by improving access to essential resources and infrastructure. Practical implications Policymakers should prioritise inclusive electricity access to stimulate entrepreneurship, particularly in rural areas where energy poverty is most severe. Originality/value This study provides empirical evidence on the link between energy poverty and entrepreneurship in SSA, a region often underrepresented in research. The use of robust econometric methods strengthens the findings’ validity.