Research questions

With the above as background, this paper attempts to investigate the relationship between cross-border infrastructure, trade, and FDI flows between countries in the GMS. Our interest extends to a number of empirical questions considered to be of importance in the context of ongoing road infrastructure development in the GMS.

• What are the empirical relationships between measures of cross-border road infrastructure, trade, and FDI between GMS countries historically (since the mid-1980s)?
• Can additional reductions in trade costs and increases in trade flows associated with investments in cross-border road infrastructure be found, and (if found) what is the magnitude of these associated trade creation effects?
• Do reductions in trade costs lead to increased foreign direct investment (FDI) and to what extent can trade creation be attributed to increased FDI flows?

In attempting to answer these questions, we hope to gain insight into the value of regional economic benefits associated with the increased regional trade and the distribution of such benefits among the GMS members. Research findings regarding these questions would hold promise in terms of fostering the design of cross-border infrastructure in the future, and in developing coordination and compensation arrangements among the involved economies.

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