Build or Borrow? A Spatial Durbin Analysis of Thailand's Eastern Economic Corridor

Does a flagship maritime corridor create economic activity, or merely shuffle it? We study Thailand's Eastern Economic Corridor (EEC, designated 2018) with a 1995-2024 provincial panel of gross provincial product and post-2018 geolocated firm microdata. We derive a firm-location model whose log-linearisation is an exact spatial Durbin model, so that the cross-province spillover is identified as a reallocation parameter and the firm-weighted adding up sum turns the reallocation hypothesis into a testable restriction rather than a narrative. The corridor's local effect is essentially zero, the spillover is negative (-0.043), the total effect is -0.027, and the cumulative effect is significantly negative, so creation is rejected in favour of reallocation. The negative sign for spillover holds across ten spatial weight matrices, including travel-time road networks, and survives placebos in time and space, while the firm data show a subdistrict's dissolutions rising with its neighbours' formation. Henceforth, we conclude the EEC borrowed activity from its periphery rather than building it.