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Do Country Centrality and Similarity to China matter in the Allocation of Belt and Road Projects?

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  • Kaku Attah Damoah,
  • Giorgia Giovannetti
  • Enrico Marvasi

Abstract

We analyze the relationship between trade patterns and the allocation of investment projects carried out under the China-led Belt and Road Initiative (BRI). Rooted on a novel database, we construct the intermediate trade network and assess its role in the allocation of the projects. Investments tend to concentrate in countries located in central nodes of the international production networks as well as towards suppliers of intermediate goods whose revealed comparative advantage (RCA) overlaps with China. High income countries closer to destination markets tend to attract fewer but larger investments. Controlling for gravity variables as well as for political proximity to China adds explanatory power without affecting the results on the importance of trade. The BRI represents an opportunity for China to upgrade its exports and for the countries receiving investments to enhance their participation in GVC with possible positive impact on development.

Suggested Citation

  • Kaku Attah Damoah, & Giorgia Giovannetti & Enrico Marvasi, 2021. "Do Country Centrality and Similarity to China matter in the Allocation of Belt and Road Projects?," Working Papers - Economics wp2021_03.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2021_03.rdf
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    Cited by:

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    More about this item

    Keywords

    Belt and Road; China; global value chains; trade in intermediates; network-centrality.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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