Do Rural Roads Promote Inclusive Entrepreneurship?

Vidhya Soundararajan and Ananyo Brahma
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Ananyo Brahma: University Of California, Santa Cruz

Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL)

Abstract: Achieving inclusivity in entrepreneurship has been challenging. Using data from firms in India, we examine how a national rural road construction program, which connected previously isolated villages, affects entrepreneurship across different social groups. Our findings reveal that new feeder roads boost the number of service enterprises for all caste categories, including lower-caste groups. However, manufacturing entrepreneurship increases only among upper-caste groups. The new roads expand industry diversity in services for lower-caste groups and in both services and manufacturing for upper-caste groups. For lower-caste groups, the positive impact on entrepreneurship likely stems from the negative effect of new roads on wage employment, which contrasts with the positive impact for upper-caste groups. Lower-caste groups capitalize on market opportunities by starting new businesses, supported by access to formal financing and primary education.

Keywords: Infrastructure development; rural roads; social inclusion; entrepreneurship; discrimination. (search for similar items in EconPapers)
JEL-codes: J15 L26 O12 O18 (search for similar items in EconPapers)
Pages: 53
Date: 2025-09
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Published in Journal of Economic Behavior & Organization

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Journal Article: Do rural roads promote inclusive entrepreneurship? (2026)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:cafral:022265

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