Work

Words and roads: Policy narratives, firm expectations, and firm response to transport infrastructure

Year: 2026

Type: article

Abstract: How do transport infrastructure and policy narratives jointly shape firm-level integration into regional value chains (RVCs)? We study this question by exploiting the staggered launch of provincial services connected to the China-Laos Railway (CLR) and tracing the response of Chinese listed firms toward the Greater Mekong Subregion (GMS) from 2017 to 2024. We distinguish between two margins of integration: an extensive margin based on disclosures of newly established GMS entities and customer or supplier relationships, and an intensive margin based on GMS-oriented value-chain exposure. DID2S estimates show a 4.7 percentage point post-launch increase in disclosed direct GMS engagement and a 0.121 standard deviation increase in value-chain exposure. A pre-opening sentence-embedding measure of strategic readiness is positively associated with the intensive-margin response, whereas lower-readiness firms show the larger change in the bounded extensive-margin outcome. These findings suggest that while physical transport connectivity operationalizes regional economic corridors, pre-existing policy-aligned expectations condition how firms self-select into different pathways of value-chain integration.

Source: Research in Transportation Economics

DOI: 10.1016/j.retrec.2026.101839

Authors: Yang Liu, Yilin Zhu, Yang Yang, Zixuan Qu, Wei Liu

Institutions: Beijing Union University, Kunming University, Agricultural Bank of China

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth, Sustainable cities and communities

Open Access status: hybrid

Estimated APC paid: $2,430