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

Ejaz Ghani, Arti Grover Goswami, William R. Kerr

NBER Working Paper No. 18524
Issued in November 2012
NBER Program(s):   PE   PR

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.

download in pdf format
   (646 K)

email paper

This paper is available as PDF (646 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18524

Published: Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing† Ejaz Ghani1, Arti Grover Goswami1 andWilliam R. Kerr2,* Article first published online: 20 APR 2015 DOI: 10.1111/ecoj.12207 © 2014 Royal Economic Society Issue Cover image for Vol. 125 Feature Issue The Economic Journal Early View (Online Version of Record published before inclusion in an issue)

Users who downloaded this paper also downloaded these:
Lovenheim and Owens w18749 Does Federal Financial Aid Affect College Enrollment? Evidence from Drug Offenders and the Higher Education Act of 1998
Ghani, Grover Goswami, and Kerr w17992 Is India's Manufacturing Sector Moving Away From Cities?
Banerjee, Duflo, and Qian w17897 On the Road: Access to Transportation Infrastructure and Economic Growth in China
Comin, Dmitriev, and Rossi-Hansberg w18534 The Spatial Diffusion of Technology
Ghani, Kerr, and O'Connell w17514 Spatial Determinants of Entrepreneurship in India
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us