Regional economic impacts assessment using SCGE model: Investigating strategic coordination between road network development and industrial policies

Measuring the economic effects of road construction is crucial for informed decision-making regarding road infrastructure projects. However, economic effects are numerical values measured based on economic definitions, so there is no guarantee that these effects will manifest themselves in the real world. Economic effects merely indicate the potential value of roads. Thus, the extent to which the measured economic effects are realized depends on how roads are utilized. In other words, simply improving roads does not automatically stimulate the economy. In this paper, we focused on the fact that the economic effects measured using a Spatial Computable General Equilibrium (SCGE) model represent the potential value of roads and compare them with actual changes in corporate production to retrospectively verify the extent to which this potential value is being realized. Through this verification, we identified the factors that act as barriers to maximizing the potential value of roads, based on discussions with local government industrial policy sections and interviews with companies, and demonstrated the importance of enhancing coordination between road network development and industrial policy.