Infrastructure and Finance: Evidence from India's GQ Highway Network

Abhiman Das, Ejaz Ghani (), Arti Grover, William Kerr and Ramana Nanda

No 31590, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use data from Reserve Bank of India to study the impact of India's Golden Quadrilateral (GQ) highway project on finance-dependent activity. Loan volumes increase by 20-30% in districts along GQ and are stronger in industries more dependent upon external finance. Loan growth begins with increases in average branch size and in places with more pre-GQ loan activity. New branch openings come later, consistent with short-run adjustment costs to expanding branch networks. These patterns are not evident in placebo tests using delayed investments in NS-EW highways. Results suggest the depth of initial financial infrastructure shapes how infrastructure investments impact localities.

JEL-codes: G21 H4 O18 R12 R14 R33 R42 (search for similar items in EconPapers)
Date: 2023-08
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-tre and nep-ure
Note: CF DEV PE PR
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Related works:
Working Paper: Infrastructure and Finance: Evidence from India's GQ Highway Network (2019)
Working Paper: Infrastructure and Finance: Evidence from India's GQ Highway Network (2019)
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