Endnotes

¹ Members of GMS are Cambodia, Lao PDR, Myanmar, Thailand, Viet Nam and two southern provinces of the People’s Republic of China: Yunnan and Guanxi. Guanxi Province joined the GMS in 2005. Due to scarcity of detailed data documented (e.g., in Guanxi Statistical Yearbooks), particularly on transport infrastructure, empirical analyses in this research had to exclude data specific to Guanxi Province.

² See, for example, Edwards (1993), Harrison (1996), Frankel and Romer (1999), and Dollar and Kraay (2004).

³ Trade-FDI nexus in line with the argument here has been well researched in the context of East Asia’s economic integration: e.g., Fukao, Ishido and Ito (2003) and Urata (2001).

⁴ See, for example, McLaren (1996) and Lee et al. (2004).

⁵ A methodological framework for economic analysis of sub-regional projects such as Adhikari and Weiss (1999) has been available, but operational practice has been limited to date due to data constraints.

⁶ Departing from Limao and Venables (ibid.), we omit estimation of a transport cost equation which could not be estimated for the case of overland transport of goods within the GMS due to data limitations. See the Appendix for details.

⁷ Econometric estimation of a simultaneous system of equations (trade, FDI, cross-border infrastructure) is not feasible, mainly due to the limited sample size available.

⁸ See Greene (2003: 293-301) for a technical treatment of the Random Effects estimator.

⁹ For example, our estimation results are generally comparable to those reported in Frankel and Romer (1999), Soloaga and Winters (2001), Clarete et al. (2003), Rose (2004), and Yamarik and Ghosh (2005).

¹⁰ The time-series component of the estimate is assigned an 83.4 to 88.5 percent weight in the final results reported.

¹¹ An unpublished report by the authors based on field research carried out along the North-South Economic Corridor in August-September of 2005 includes a discussion of possible distribution analysis of the impact of cross-border road infrastructure that is based on standard methodology for project economic analysis. This discussion notes a number of shortcomings in the standard methodology in terms of its capacity to capture relevant project externalities—including those associated with cross-border infrastructure.

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