Economic development of land-border regions under ASEAN economic integration

Abstract

Although ASEAN members have achieved economic growth through regional economic integration, the development gap between urban and rural regions remains a key challenge for most members. Economic development in land-border regions, which is still lagging, is also a significant measure to reduce regional disparities. This study examines whether trade liberalisation facilitates or hinders the development of land-border regions among ASEAN members. We estimate the effects of trade with adjacent country on the level of economic activity in the land-border regions of Cambodia, Laos, Myanmar, Thailand, and Vietnam using satellite nighttime light density. Our findings support the positive effects of trade with adjacent country on economic development in land-border regions. Additionally, lower transportation costs and better market access are significant factors that promote economic development in land-border regions. Although the positive effects of participating in regional production networks are still limited, both domestic and international transport infrastructures are significant factors in enabling land-border regions to achieve economic development.