The impact of an international bridge on households: evidence from household panel data in Thailand

Kazunobu Hayakawa, Souknilanh Keola, Sudsawasd Sasatra and Yamanouchi Kenta

No 794, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper empirically investigates the impact of an international bridge being constructed between Thailand and Laos on household behavior in Thailand. Our empirical results suggest that the establishment of an international bridge boosted the growth in Thailand of the industry in which the country had a comparative advantage, i.e., agriculture. Therefore, this industry enjoyed positive effects from the bridge’s construction. Specifically, we discovered that income, especially farm income, rose in households headed by a male or a young person. Furthermore, the bridge’s construction also increased the amount of agricultural land, the number of agricultural workers, and household debt ratios. On the other hand, income decreased in households with a female or an elderly head. To address possible endogeneity issues on the choice of the bridge’s location, we restricted this study to specific provinces. We also controlled for several confounding factors and conducted placebo tests to confirm the robustness of our results.

Keywords: International bridge; Trade liberalization; Household; Trade (search for similar items in EconPapers)
JEL-codes: F10 G51 H54 (search for similar items in EconPapers)
Date: 2020-07
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 794. 2020-07

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