## 1 Introduction  
Under the new growth theory ([PERSON], 1986; [PERSON], 1988), endogenous growth models emphasize technical progress (capital stock, human capital and innovation). From the early 1990s, foreign direct investment (FDI) has been a crucial source of enhancing economic growth in emerging economies. Thailand's regional development has been enhanced by the development of a Special Economic Zone (SEZ), which is viewed as an effective economic instrument to accelerate economic growth. Since 1961, the SEZ development policies have been implemented by developing major infrastructure projects, and regional development programs. The World Bank (2017) states that creating an SEZ can stimulate economic expansion both within and outside the zone. Inside the zone, it attracts foreign investment as well as facilitates skills and innovation transfer, while outside the zone it evokes synergies and knowledge spillovers to foster additional economic activity. Typically, the success of an SEZ depends on the SEZ's characteristics, the structure and the regional and country contexts. Since an SEZ operates as a geographic region within a country, localized employment churn is registered as job creation. Moreover, economic dynamism can account for variations in regional productivity, and improves the standard of living of the nation ([PERSON], 2014). In 2014, the Thai government launched pilot SEZ projects in five border provinces, namely Tak, Aranyaprathet, Mukdahan, Songkhla, and Trat, in which the government granted investors special privileges including tax and non-tax incentives. The Gross Provincial Production (GPP) accounts for the chain volume measures of production outputs at regional and provincial levels. The compilation of GPP as part of the system for National Accounts of Thailand is performed using a bottom-up approach, which effectively compiles and improves the indicators of provincial-level production. There are 16 economic activities including agriculture production (agriculture, hunting and forestry; and fishing) and non-agriculture production (mining and quarrying; manufacturing; construction; sale; hotels and restaurants; financial intermediation; real estate, renting and business activities; etc.). The change in real value added is employed in evaluating the changes of each production output. Looking more closely at economic performance through GPP, Songkhla produces many agricultural products (14% share of GPP), which provides copious raw materials, thus encourages agro-industries such as rubber, palm oil and seafood processing (21% share of GPP). Songkhla has a strategic location on the North-South Economic Corridor, which is directly connected to Malaysia and Singapore. It is a service-based economy (18% share of GPP) (Government Public Relations Department, 2016). The values of cross-border trade account for more than 50% of Thailand's total border trade. Therefore, the major sectors contributing to economic growth can be categorized into three groups: (1) manufacturing; (2) agriculture; and (3) service sector ([PERSON] et al., 2016). As a result, forecasting and measuring of the GPP, FDI and border trade are crucial for driving the SEZ operation. Generally, development is measured using aggregated models based on centralized data. However, a top-down framework can frequently be ineffective at a local level. In fact, regional performance can be better measured to explore economic convergence based on specific local characteristics ([PERSON] et al., 2012; [PERSON] and [PERSON], 2016). Many empirical studies on economic growth dependence employ [PERSON]'s theorem ([PERSON] and [PERSON], 1987) or vector autoregressive (VAR) models ([PERSON], 1994; [PERSON], 2002; [PERSON], 2005). However, classical VAR models can capture only linear and symmetric dependences in time and between series. In a small degree of freedom, if the dependences of the system are modeled with longer lags, those larger estimated parameters might be misspecified.