Regional Economic Corridors and Household Income: A Pathway to Equitable Growth?

Abstract

This study investigates the impact of regional economic corridors (RECs) on household income in Malaysia using micro-level cross-sectional data from 2007 to 2019. The results show that although corridor strategies contribute to income growth, their effects remain modest. Household incomes in corridor states are, on average, lower than in non-corridor states, though this gap has narrowed over time, suggesting that corridor effects require longer periods to materialize. More importantly, spatial divides—between developed and less-developed states and between urban and rural regions—explain income variation more effectively than corridor policies. Education, skills and gender further exert stronger influence on household income than corridor interventions. Our household-level income assessment highlights the importance of embedding skill development, educational attainment and gender equality into REC policies, while prioritizing the reduction of rural–urban disparities to enhance their effectiveness in raising household income.