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

Abhiman Das, Ejaz Ghani, Arti Grover Goswami, William R. Kerr, Ramana Nanda

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

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Year of publication:	August 2023
Authors:	Das, Abhiman ; Ghani, Ejaz ; Grover, Arti ; Kerr, William R. ; Nanda, Ramana
Institutions:	National Bureau of Economic Research (issuing body)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Autobahn \| Motorway \| Verkehrsinfrastruktur \| Transport infrastructure \| Infrastrukturinvestition \| Infrastructure investment \| Infrastrukturfinanzierung \| Infrastructure financing \| Finanzmarkt \| Financial market \| Wirkungsanalyse \| Impact assessment \| Indien \| India