Financial connectivity and resource security under the belt and road initiative: An empirical analysis of sovereign debt, FDI, and military expenditure

This study examines the impact of financial connectivity under the Belt and Road Initiative—specifically sovereign debt, foreign direct investment (FDI), and military expenditure—on resource security, with particular attention to heterogeneity among countries with different income levels. The analysis reveals the following: first, an increase in sovereign debt leads to the deterioration of resource security; second, foreign direct investment (FDI) has a positive effect on resource security; third, a rise in military expenditure results in worsened resource security; and finally, further heterogeneity analysis confirms significant differences in the effects of sovereign debt, FDI, and military expenditure on resource security across countries with different income levels. In low-income countries, the effects of sovereign debt and FDI on resource security are more pronounced, while the impact of military expenditure is relatively modest. By contrast, in high-income countries, sovereign debt has a lesser influence on resource security, whereas military expenditure exerts a notably adverse effect.