Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing

Ejaz Ghani (), Arti Grover and William Kerr

No 18524, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the impact of the Golden Quadrilateral (GQ) highway project on the Indian organized manufacturing sector using enterprise data. The GQ project upgraded the quality and width of 5,846 km of roads in India. We use a difference-in-difference estimation strategy to compare non-nodal districts based upon their distance from the highway system. We find several positive effects for non-nodal districts located 0-10 km from GQ that are not present in districts 10-50 km away, most notably higher entry rates and increases in plant productivity. These results are not present for districts located on another major highway system, the North-South East-West corridor (NS-EW). Improvements for portions of the NS-EW system were planned to occur at the same time as GQ but were subsequently delayed. Additional tests show that the GQ project's effect operates in part through a stronger sorting of land-intensive industries from nodal districts to non-nodal districts located on the GQ network. The GQ upgrades further helped spread economic activity to moderate-density districts and intermediate cities.

JEL-codes: L10 L25 L26 L60 L90 L91 L92 M13 O10 R00 R10 R11 R14 (search for similar items in EconPapers)
Date: 2012-11
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Published as Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing† Ejaz Ghani1, Arti Grover Goswami1 andWilliam R. Kerr2,* Article first published online: 20 APR 2015 DOI: 10.1111/ecoj.12207 © 2014 Royal Economic Society Issue Cover image for Vol. 125 Feature Issue The Economic Journal Early View (Online Version of Record published before inclusion in an issue)

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Journal Article: Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing (2016)
Working Paper: Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing (2012)
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