From Battlefield to Marketplace: Legacies, Highways and Polycentric Development in Vietnam

Manabu Nose and Yasuyuki Sawada
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Manabu Nose: Keio University, Faculty of Economics
Yasuyuki Sawada: University of Tokyo, Faculty of Economics, Graduate School of Economics

No DP2026-014, Keio-IES Discussion Paper Series from Institute for Economics Studies, Keio University

Abstract: Why do transport investments induce polycentric industrial growth in specific instances, rather than reinforcing existing cores? By investigating large-scale Greater Mekong Subregion highway projects in Northern Vietnam, where postwar state-led reconstruction restored monocentric urban structure following wartime devastation, this paper shows that later corridor investments generated nonlinear, polycentric industrial growth. Improved market access induced large manufacturing entry in agrarian peripheries, with effects amplified by local supply-chain depth. A spatial general equilibrium model with input-output linkages replicates this mechanism. The corridor raised income but widened spatial inequality, a trade-off mitigated by feeder-road complementarity. Infrastructure acts as a spatial big push only when connectivity and production networks jointly trigger new clusters. Overall, a structural shift from monocentric battlefield resilience to polycentric market expansion is catalyzed by infrastructure investments. *Revised DP2025-010

Keywords: spatial structural transformation; market access; agglomeration; input-output linkages; core-periphery (search for similar items in EconPapers)
JEL-codes: H54 O14 O18 R11 R12 R42 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2026-07-05
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