In this paper we study whether or not transportation infrastructure disrupts local monopsony power in labor markets using an expansion of the national highway system in India. Using panel data on manufacturing firms, we find that monopsony power in labor markets is reduced among firms near newly...

This paper examines the impact of roads on structural transformation and business composition theoretically and empirically. We develop a two-sector model of regional trade with endogenous firm entry that highlights two opposing forces. \textit{Ceteris paribus} lower trade costs in...