The Influence of Road Transportation Infrastructure Development on Economic Growth in ASEAN

Abstract

This study analyzes the effect of the ratio of paved road length to population density as a proxy for road transportation infrastructure on economic growth in the ASEAN region during the period 2008-2023, with the value added of the industrial sector, including construction, and inflation based on the GDP deflator as control variables. This study uses balanced panel data from nine ASEAN member countries, namely Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, and Thailand, resulting in a total of 144 observations. Vietnam and Timor-Leste were not selected due to data limitations. Based on the results of the Chow test and the Breusch-Pagan Lagrange Multiplier test, the Common Effect Model was chosen as the most appropriate estimation method. The results show that the ratio of paved road length to population density has a positive and statistically significant effect on economic growth. This finding indicates that improving road infrastructure can strengthen interregional connectivity, facilitate the distribution of goods and services, and increase economic efficiency. Meanwhile, the value added of the industrial sector, including construction, has a significant negative effect on economic growth, while inflation has a positive but insignificant effect. This finding suggests that the ratio of paved road length to population density is positively associated with economic growth in the ASEAN region during the study period.