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Do Rural Roads Promote Inclusive Entrepreneurship?

Author

Listed:
  • Vidhya Soundararajan

    (Centre for Advanced Financial Research and Learning (CAFRAL))

  • Ananyo Brahma

    (University Of California, Santa Cruz)

Abstract

Achieving inclusivity in entrepreneurship has been challenging. Using data from firms in India, we examine how a national rural road construction program, which connected previously isolated villages, affects entrepreneurship across different social groups. Our findings reveal that new feeder roads boost the number of service enterprises for all caste categories, including lower-caste groups. However, manufacturing entrepreneurship increases only among upper-caste groups. The new roads expand industry diversity in services for lower-caste groups and in both services and manufacturing for upper-caste groups. For lower-caste groups, the positive impact on entrepreneurship likely stems from the negative effect of new roads on wage employment, which contrasts with the positive impact for upper-caste groups. Lower-caste groups capitalize on market opportunities by starting new businesses, supported by access to formal financing and primary education.

Suggested Citation

  • Vidhya Soundararajan & Ananyo Brahma, 2025. "Do Rural Roads Promote Inclusive Entrepreneurship?," Working Papers 022265, Centre for Advanced Financial Research and Learning (CAFRAL).
    • Handle: RePEc:ris:cafral:022265
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    Keywords

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    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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