| Number |
CREPEDP-170 |
| Publication Date |
May 2025 |
| Title |
From Battlefield to Marketplace:
Industrialization via Interregional Highway Investments
in the Greater Mekong Sub-Region |
| Author |
Manabu Nose, Yasuyuki Sawada, and Tung Nguyen |
| Abstract |
This paperexaminesthenonlineareffectsofalarge-scalehighwayconstructionproject
in the Greater Mekong Subregion, which connects the historically conflict-affected
borderlands of northern Vietnam to the country’s industrial core. Employing a market
access framework with geo-coded highway network and firm-level panel data, we es
timate the causal impact of improved interregional connectivity, while accounting for
spillovers via production input-output linkages. To address endogeneity issues aris
ing from non-random route placements, we construct least-cost path spanning tree
networks. Our instrumental variable estimates reveal that enhanced market access
spurred manufacturing firm agglomeration and employment growth, particularly in
peripheral rural areas. We further explore the underlying sources of polycentric de
velopment patterns, finding pronounced effects in second-tier cities characterized by
less intense competition and better access to national road networks. Our findings are
robust to controls for industrial zones, underscoring the pivotal role of the upgraded
highway connectivity in transforming previously marginalized regions and support
ing economy-wide industrialization over the past decade
|
| Keywords |
spatial structural transformation, market access, treatment spillover, agglom
eration, core-periphery. |
| Other information |
Paper in English (69 pages) |