IDEAS home Printed from https://ideas.repec.org/a/wly/apecpp/v47y2025i3p1003-1028.html

Impact of rural roads on agricultural exports in India: An instrumental variable approach

Author

Listed:
  • Manu Bansal

Abstract

In this study, we estimate the effect of rural roads on agricultural exports in India. We use a novel data set of state‐level agricultural exports at a highly disaggregated product level (HS6). We combine it with publicly available data on road construction under Pradhan Mantri Gram Sadak Yojana (PMGSY) from 2004 to 2016 to estimate the effect of rural road access on agricultural exports. We use the instrumental variable (IV) approach, whereby we use discontinuity in treatment under the program at the population‐based eligibility cut‐offs for road construction as a plausible exogenous variation in road placement. This rectifies the endogeneity bias due to the placement of road construction. We find strong evidence of the positive effect of increased access to rural roads on agricultural exports. In search of mechanisms, we also find evidence of an increase in the mechanization of farms due to the construction of rural roads. We also find that the results were primarily driven by states having more initial agricultural productivity.

Suggested Citation

  • Manu Bansal, 2025. "Impact of rural roads on agricultural exports in India: An instrumental variable approach," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 47(3), pages 1003-1028, July.
    • Handle: RePEc:wly:apecpp:v:47:y:2025:i:3:p:1003-1028
    DOI: 10.1002/aepp.13502
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/aepp.13502
    Download Restriction: no
    File URL: https://libkey.io/10.1002/aepp.13502?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Aggarwal, Shilpa, 2021. "The long road to health: Healthcare utilization impacts of a road pavement policy in rural India," Journal of Development Economics, Elsevier, vol. 151(C).
    2. Munisamy Gopinath & P. Lynn Kennedy, 2000. "Agricultural Trade and Productivity Growth: A State-level Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1213-1218.
    3. Lehne, Jonathan & Shapiro, Jacob N. & Vanden Eynde, Oliver, 2018. "Building connections: Political corruption and road construction in India," Journal of Development Economics, Elsevier, vol. 131(C), pages 62-78.
    4. Taotao Deng, 2013. "Impacts of Transport Infrastructure on Productivity and Economic Growth: Recent Advances and Research Challenges," Transport Reviews, Taylor & Francis Journals, vol. 33(6), pages 686-699, November.
    5. Qinan Lu & Xiaodong Du & Huanguang Qiu, 2022. "Adoption patterns and productivity impacts of agricultural mechanization services," Agricultural Economics, International Association of Agricultural Economists, vol. 53(5), pages 826-845, September.
    6. Khondoker Abdul Mottaleb & Samarendu Mohanty & Andrew Nelson, 2015. "Strengthening Market Linkages of Farm Households in Developing Countries," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 37(2), pages 226-242.
    7. Robin Burgess & Remi Jedwab & Edward Miguel & Ameet Morjaria & Gerard Padró i Miquel, 2015. "The Value of Democracy: Evidence from Road Building in Kenya," American Economic Review, American Economic Association, vol. 105(6), pages 1817-1851, June.
    8. Volpe Martincus, Christian & Carballo, Jerónimo & Cusolito, Ana, 2017. "Roads, exports and employment: Evidence from a developing country," Journal of Development Economics, Elsevier, vol. 125(C), pages 21-39.
    9. Anjali Adukia & Sam Asher & Paul Novosad, 2020. "Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction," American Economic Journal: Applied Economics, American Economic Association, vol. 12(1), pages 348-376, January.
    10. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    11. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-737, July.
    12. Gerald Shively & Ganesh Thapa, 2017. "Markets, Transportation Infrastructure, and Food Prices in Nepal," American Journal of Agricultural Economics, John Wiley & Sons, vol. 99(3), pages 660-682, April.
    13. Gerald Shively & Ganesh Thapa, 2017. "Markets, Transportation Infrastructure, and Food Prices in Nepal," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 660-682.
    14. Xiaobo Zhang & Shenggen Fan, 2004. "How Productive Is Infrastructure? A New Approach and Evidence from Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 492-501.
    15. Shamdasani, Yogita, 2021. "Rural road infrastructure & agricultural production: Evidence from India," Journal of Development Economics, Elsevier, vol. 152(C).
    16. Shohei Nakamura & Tom Bundervoet & Mohammed Nuru, 2020. "Rural Roads, Poverty, and Resilience: Evidence from Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 56(10), pages 1838-1855, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jia Li, 2025. "Chinese Aid for Transportation Infrastructure and Child Health in Africa," Health Economics, John Wiley & Sons, Ltd., vol. 34(12), pages 2255-2269, December.
    2. Kumar Gautam, Santosh & Shandal, Monica & Zucker, Ariel, 2026. "Roads to the Market or the Town Hall? New Evidence from India's PMGSY," IZA Discussion Papers 18468, IZA Network @ LISER.
    3. Basistha, Ahana & Dhillon, Amrita & Chaudhuri, Arka Roy, 2024. "Elections and Rural Road Construction: Evidence from India," CAGE Online Working Paper Series 712, Competitive Advantage in the Global Economy (CAGE).
    4. Aparajita Dasgupta & Devvrat Raghav, 2024. "Rural Roads, Climate Change, and the Dynamics of Structural Transformation: Evidence from India," Working Papers 122, Ashoka University, Department of Economics.
    5. Chakrabarti, Sandip, 2025. "Rural roads and economic development: Insights from India," Transport Policy, Elsevier, vol. 168(C), pages 305-318.
    6. Kumar Gautam, Santosh & Shandal, Monica & Zucker, Ariel, 2025. "Connectivity and Rural Development: Examining India’s Rural Road Construction Scheme," IZA Discussion Papers 17775, IZA Network @ LISER.
    7. Pkhikidze,Nino, 2024. "Connectivity, Road Quality, and Jobs : Evidence from Armenia," Policy Research Working Paper Series 10847, The World Bank.
    8. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    9. Bu, Tao & Tang, Daisheng & Zhang, Zheng & Jiang, Chengkai, 2025. "Rural road improvement and individual health in China," Journal of Asian Economics, Elsevier, vol. 98(C).
    10. Sengupta, Reshmi & Rooj, Debasis, 2025. "Road connectivity and contraceptive choices: Empirical evidence from rural India," World Development Perspectives, Elsevier, vol. 38(C).
    11. Chen, Xiaoguang & Gong, Binlei & Qin, Zhilong & Wang, Xiaoli, 2026. "High-speed railroads and local agricultural development," Journal of Development Economics, Elsevier, vol. 179(C).
    12. Brahma, Ananyo & Soundararajan, Vidhya, 2026. "Do rural roads promote inclusive entrepreneurship?," Journal of Economic Behavior & Organization, Elsevier, vol. 241(C).
    13. repec:osf:socarx:ejb8x_v1 is not listed on IDEAS
    14. Nandwani, Bharti & Roychowdhury, Punarjit & Shankar, Binay, 2025. "Rural Roads and Firm Outcomes in India," GLO Discussion Paper Series 1650, Global Labor Organization (GLO).
    15. Aparajita Dasgupta & Anahita Karandikar & Devvrat Raghav, 2024. "Road Access, Fertility, and Child Health in Rural India," Population and Development Review, The Population Council, Inc., vol. 50(1), pages 117-147, March.
    16. Eynde, Oliver Vanden & Wren-Lewis, Liam, 2024. "Complementarities in Infrastructure: Evidence from Indian Agriculture," SocArXiv ejb8x, Center for Open Science.
    17. Santosh Gautam & Ermal llirjani & Patralekha Ukil, 2025. "On the Road to a Better Life? Rural Road and Economic Development in Albania," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 37(6), pages 1071-1098, December.
    18. Shreya Biswas & Ritika Jain, 2026. "The Road to Safety - Examining the Nexus between Road Infrastructure and Crime in Rural India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 24(1), pages 103-126, March.
    19. Seebacher, Moritz, 2023. "Pathways to progress: The complementarity of bicycles and road infrastructure for girls’ education," Economics of Education Review, Elsevier, vol. 97(C).
    20. Cucu, Florin, 2025. "Roads, internal migration and the spatial sorting of U.S. high-skill workers," Journal of Urban Economics, Elsevier, vol. 146(C).
    21. Noah Kaiser & Christina K. Barstow, 2022. "Rural Transportation Infrastructure in Low- and Middle-Income Countries: A Review of Impacts, Implications, and Interventions," Sustainability, MDPI, vol. 14(4), pages 1-48, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:apecpp:v:47:y:2025:i:3:p:1003-1028. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2040-5804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.