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

38 Pages Posted: 11 Nov 2012 Last revised: 16 Oct 2014

See all articles by Syed Ejaz Ghani

Syed Ejaz Ghani

World Bank

Arti Grover Goswami

World Bank

William Kerr

Harvard University - Entrepreneurial Management Unit

Multiple version iconThere are 3 versions of this paper

Date Written: November 2012

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.

Suggested Citation

Ghani, Ejaz and Goswami, Arti Grover and Kerr, William R., Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing (November 2012). NBER Working Paper No. w18524. Available at SSRN: https://ssrn.com/abstract=2173625

Ejaz Ghani (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Arti Grover Goswami

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

William R. Kerr

Harvard University - Entrepreneurial Management Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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