The Trans-Java Toll Road and Regional Growth in Central Java: A Difference-in-Differences Analysis

Authors

Keywords:

toll road, regional economic growth, difference-in-differences, Central Java, infrastructure planning, transport infrastructure

Abstract

Indonesia completed a continuous tolled expressway between Jakarta and Surabaya in December 2018, yet its effect on the regions it crosses has rarely been tested against a comparison group. This study compares the 12 regencies and cities of Central Java traversed by the corridor with the 23 that are not, using constant-price gross regional domestic product (GRDP) for 2010–2020 from the World Bank’s Indonesia Database for Policy and Economic Research (385 unit-years). A two-way fixed-effects difference-in-differences model on annual growth, with separate terms for 2019 and the pandemic year 2020, gives a corridor differential of 0.19 percentage points in 2019 (95% confidence interval −0.17 to 0.55) and 0.33 points in 2020 (−0.64 to 1.29). Neither differs from zero under cluster-robust, wild-bootstrap or randomisation inference, and both change sign when three atypical comparison regencies are removed. Pre-period leads are jointly insignificant (p = 0.15). The transport and storage sector shows no differential gain. The corridor’s early local growth dividend is therefore statistically indistinguishable from zero, which argues for planning toll corridors together with complementary local investment and for building evaluation into project design.

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2026-10-30

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Vol. 2 No. 1 (2026)

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How to Cite

The Trans-Java Toll Road and Regional Growth in Central Java: A Difference-in-Differences Analysis. (2026). Journal of Engineering, Infrastructure and Geosciences, 2(1), 48–97. https://researchcenterprogresif.org/ojs/index.php/jeig/article/view/123