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Assessment of the effects of infrastructure investment under the belt and road initiative

Author

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  • Yang, Gaoju
  • Huang, Xianhai
  • Huang, Jiahui
  • Chen, Hangyu

Abstract

Based on the estimated effect of infrastructure investment on total factor productivity (TFP) enhancing and trade costs reducing, this paper uses the data from Asian Development Bank to numerically assess the effects of Asian nations' infrastructure investment under the Belt and Road Initiative within the Global Trade Analysis Project (GTAP) model, and the results show that most countries or regions' economic growth, welfare, foreign trade, and trade terms are promoted in varying degrees. However, some countries (regions) have suffered. Additionally, the existing division of labor and trade patterns between developed economies and developing countries somehow consolidated because of changes in trade. In addition, China's industrial transformation and upgrading will benefit from the infrastructure investment under the Belt and Road Initiative, namely, the traditional industries slowdown or decline and high-tech manufacturing and service industries speed up, along with the optimization of factor allocation among industries.

Suggested Citation

  • Yang, Gaoju & Huang, Xianhai & Huang, Jiahui & Chen, Hangyu, 2020. "Assessment of the effects of infrastructure investment under the belt and road initiative," China Economic Review, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:chieco:v:60:y:2020:i:c:s1043951x20300158
    DOI: 10.1016/j.chieco.2020.101418
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    8. Veljko Fotak & William Megginson & Yi-Da Tsai, 2022. "Urban Autonomy: Is China’s Belt and Road Initiative a Zero-Sum Game?," BAFFI CAREFIN Working Papers 22184, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    9. Zhang, Cheng & Yao, Yangyang & Zhou, Han, 2023. "External technology dependence and manufacturing TFP: Evidence from China," Research in International Business and Finance, Elsevier, vol. 64(C).
    10. Nugent, Jeffrey B. & Lu, Jiaxuan, 2021. "China's outward foreign direct investment in the Belt and Road Initiative: What are the motives for Chinese firms to invest?," China Economic Review, Elsevier, vol. 68(C).
    11. Artemis Chang & Rui Torres de Oliveira & Hsi-Mei Chung & Nan Zheng, 2022. "Subnational response differences on the Belt and Road Initiative policy and firm internationalization: A longitudinal and multi-level approach," Journal of International Business Policy, Palgrave Macmillan, vol. 5(2), pages 152-171, June.
    12. Wei Yang & Feihuang Xue & Jinfeng Shi & Yanmin Shao & Di Wang, 2021. "Factors Affecting the Trade Dependence Relationship of Asian Countries with China: Implications for China’s Belt and Road Initiative," Sustainability, MDPI, vol. 13(19), pages 1-23, September.
    13. Yuan Chang & Xinguo Ming & Xianyu Zhang & Tongtong Zhou & Xiaoqiang Liao & Sijia Cao, 2021. "Servitization and Sustainable Value Creation Strategy for China’s Manufacturing Industry: A Multiple Case Study in the Belt and Road Initiative," Sustainability, MDPI, vol. 13(20), pages 1-28, October.
    14. Ning Zhu & Xiang Dai & Tomas Baležentis & Dalia Streimikiene & Zhiyang Shen, 2022. "Estimating production gains from international cooperation: Evidence from countries along the Belt and Road," Economic Change and Restructuring, Springer, vol. 55(2), pages 715-736, May.
    15. Koffi Dumor & Yao Li & Enock Mintah Ampaw & Charles Hackman K. Essel & Edwina Oheneasi Essel & Onesmus Mbaabu Mutiiria, 2021. "Situating Africa in the exports patterns of China's Belt and Road Initiative: A network analysis," African Development Review, African Development Bank, vol. 33(2), pages 343-356, June.
    16. Jin, Gang & Shen, Kunrong & Jiang, Yue, 2021. "Does the Belt and Road Initiative cause more troubled Chinese overseas investments?," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 217-232.
    17. Yuan, Qianqian & Baležentis, Tomas & Shen, Zhiyang & Streimikiene, Dalia, 2021. "Economic and environmental performance of the belt and road countries under convex and nonconvex production technologies," Journal of Asian Economics, Elsevier, vol. 75(C).
    18. Alves, Ana Cristina & Gong, Xue & Li, Mingjiang, 2023. "The BRI: A new development cooperation paradigm in the making? Unpacking China’s infrastructure cooperation along the Maritime Silk Road," World Development, Elsevier, vol. 169(C).
    19. Liguo Zhang & Cuiting Jiang & Xiang Cai & Xin Huang & Jun Wu & Ping Chen, 2023. "Transport-Environmental Kuznets Curve Hypothesis: Evidence From Belt and Road," SAGE Open, , vol. 13(2), pages 21582440231, June.
    20. Joanna Wolszczak-Derlacz & Yuxin Lu, 2022. "The role of the One-Belt One-Road initiative in China’s exports and global value chains," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(2), pages 317-341, June.
    21. Cristina Di Stefano & P. Lelio Iapadre & Ilaria Salvati, 2021. "Trade and Infrastructure in the Belt and Road Initiative: A Gravity Analysis Based on Revealed Trade Preferences," JRFM, MDPI, vol. 14(2), pages 1-15, January.

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    More about this item

    Keywords

    The belt and road; Infrastructure investment; Total factor productivity (TFP); Trade costs;
    All these keywords.

    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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