京都大学 大学院経済学研究科・経済学部

Title: "From Battlefield to Marketplace: Industrialization via Interregional Highway Investment in the Greater Mekong Sub-Region"

Abstract: This paper evaluates the heterogeneous impact of a large-scale highway construction project in the Greater Mekong Sub-Region, linking the mountainous China-Vietnam borders to industrial centers in northeastern Vietnam. Employing the market access approach alongside geo-coded highway network and firm-level panel data, we estimate the long-term effects of the highways, accounting for their spillover impact through production input-output linkages. Exploiting variations in topological and meteorological conditions, our findings reveal that enhanced market potential has led to the agglomeration of manufacturing firms in both core and peripheral cities, accompanied by significant creation of manufacturing employment in rural peripheries. The paper delves into the underlying mechanism driving polycentric development patterns, highlighting pronounced GMS treatment effects in second-tier cities with intermediate production linkages and connections to major national roads. The overall findings remain robust even when accounting for the impact of Vietnam’s industrial zones, underscoring that the upgraded highway connectivity has played a pivotal role in facilitating economy-wide industrialization over decades.