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

55 Pages Posted: 21 Aug 2023

See all articles by Abhiman Das

Abhiman Das

Indian Institute of Management Ahmedabad

Ejaz Ghani

World Bank

Arti Grover

World Bank

William Kerr

Harvard University - Entrepreneurial Management Unit

Ramana Nanda

Imperial College London

Multiple version iconThere are 3 versions of this paper

Date Written: August 2023

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.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Das, Abhiman and Ghani, Ejaz and Grover, Arti and Kerr, William R. and Nanda, Ramana, Infrastructure and Finance: Evidence from India's Gq Highway Network (August 2023). NBER Working Paper No. w31590, Available at SSRN: https://ssrn.com/abstract=4546463

Abhiman Das (Contact Author)

Indian Institute of Management Ahmedabad ( email )

Vastraour
Ahmedabad, 380015
India

Ejaz Ghani

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Arti Grover

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

Ramana Nanda

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
6
Abstract Views
197
PlumX Metrics