The Journal of Quantitative & Technical Economics | Associate Professor Sui Hongguang’s Team Makes New Progress in South-South Cross-Border Transportation Infrastructure Cooperation

Recently, the collaborative paper South-South Cooperation: Cross-Border Transportation Infrastructure, Regional Integration and Economic Development – Evaluation of the Economic Effects of the China-Laos Railway by Associate Professor Sui Hongguang was officially published in the authoritative economics journal The Journal of Quantitative & Technical Economics. The study points out that the economic integration brought by cross-border transportation infrastructure plays an important role in boosting the economic vitality of underdeveloped countries, and activates the core mechanisms supporting long-term growth by stimulating trade vitality, accelerating population agglomeration and enhancing risk buffering capacity. The research results provide empirical support and decision-making reference for infrastructure construction cooperation under the Belt and Road Initiative.

As a flagship project of the Belt and Road Initiative and the Indochina Peninsula Economic Corridor, the China-Laos Railway is one of the representative projects of cross-border infrastructure construction under the framework of South-South Cooperation. It not only helps significantly improve regional transportation conditions, but also opens up a stable and efficient external transportation corridor for Laos, breaking the infrastructure constraints that have long hindered its economic development. Existing studies mostly focus on the local effects of internal transportation networks in a single country, pay insufficient attention to the strategic role of cross-border infrastructure in regional economic integration, and mostly focus on short-term economic and trade exchanges, lacking in-depth discussion on the transmission paths of trade, factors, risks and other aspects supporting long-term growth.

Based on VIIRS/DNB nighttime light data from January 2020 to September 2024, this study constructs a high-precision grid panel data with 1 square kilometer spatial resolution and monthly frequency, and adopts the difference-in-differences method to evaluate the economic effects of the opening of the China-Laos Railway. The results show that the opening of the China-Laos Railway has significantly improved the level of economic activities in the counties where the stations are located, increasing the regional nighttime light intensity by about 1.67%.

Further analysis finds that the China-Laos Railway has reduced the cross-border border effect by about 80%. While promoting transnational economic integration, Laos presents a spatial heterogeneity characteristic of "promoting distant areas and competing with nearby areas". A comparison with other international aid projects shows that the effect intensity of the China-Laos Railway project is 2.7 times that of international aid transparency projects, fully demonstrating its unique advantages in promoting regional economic development.

Mechanism analysis shows that the China-Laos Railway exerts multiple growth effects by promoting regional economic integration. On the one hand, railway connectivity has significantly promoted bilateral trade between China and Laos, showing a growth trend in both intensive and extensive margins. Among them, Laos’ agricultural product exports to China have increased by about 26.67% compared with the base period, and imports of manufactured products have increased significantly. On the other hand, the railway has improved the regional risk buffering capacity, which can effectively alleviate the decline in economic activities caused by extreme climates, accompanied by a significant population agglomeration effect.

Co-authors of the paper: Zhang Shihua, PhD Candidate, School of Economics, Nankai University; Li Xijie, PhD Candidate, School of Government and Public Administration, Sun Yat-sen University.

Sui Hongguang is Associate Professor at the School of Economics, Shandong University, and Deputy Secretary-General of Shandong Provincial Society of International Economics. His research directions include multinational corporations, international trade and growth theory. His research results have been published in authoritative domestic and international journals such as Southern Economic Journal , Journal of Applied Economics , The Journal of World Economy , and The Journal of Quantitative & Technical Economics , and he has presided over a number of projects of the National Natural Science Foundation of China and the National  Social Science Foundation of China.