Discussion Papers

No.932 Economic Effects of Bypass Roads on National Highway No.1 in Vietnam

by Masami Ishida, Nguyen Binh Giang, Phi Vinh Tuong, Souknilanh Keola

March 2024


In Vietnam, a lot of bypass roads have been developed on the National Highway No. 1A (NH No. 1A) since 2000. The number of bypass roads developed after 2000 surpasses 90% of the existing bypass roads. The major types of the bypass roads were developed in the provincial capital to avoid traffic congestion. Other types, however, were developed as part of constructing bridges and tunnels. We adopted the technic of instrumental variable regression to estimate the economic effects of new bypass roads. In the first stage regression, we estimated the effects of constructing bridges and tunnels on the bypass development with variables that expressed geographical characteristics. In the second stage regression, we found positive effects of bypass roads on the gross provincial income and provincial monthly income per capita within the own province. Furthermore, the effects of the summed lengths of the bypass roads in other provinces surpass the former effects bypass road developed in its own province and we confirmed the greater mutual effects of bypass road on other provinces.

Keywords: bypass road, Vietnam, National Highway No. 1A, transport infrastructure
JEL classification: O18, O53, P35, R41

Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.