IDEAS home Printed from https://ideas.repec.org/a/sae/jocore/v69y2025i2-3p406-433.html

Does India Use Development Finance to Compete With China? A Subnational Analysis

Author

Listed:
  • Gerda Asmus-Bluhm
  • Vera Z. Eichenauer
  • Andreas Fuchs
  • Bradley Parks

Abstract

China and India increasingly provide aid and credit to developing countries. This article explores whether India uses these financial instruments to compete for geopolitical and commercial influence with China. We build a new geocoded dataset of Indian government-financed projects in the Global South between 2007 and 2014 and combine it with data on Chinese government-financed projects. Our regression results for 2,333 provinces within 123 countries demonstrate that India’s Exim Bank is significantly more likely to locate a project in a given jurisdiction if China provided government financing there in the previous year. Since this effect is more pronounced in countries where India is more popular relative to China and where both lenders have a similar export structure, we interpret this as evidence of India competing with China. By contrast, we do not find evidence that China uses official aid or credit to compete with India through co-located projects.

Suggested Citation

  • Gerda Asmus-Bluhm & Vera Z. Eichenauer & Andreas Fuchs & Bradley Parks, 2025. "Does India Use Development Finance to Compete With China? A Subnational Analysis," Journal of Conflict Resolution, Peace Science Society (International), vol. 69(2-3), pages 406-433, March.
    • Handle: RePEc:sae:jocore:v:69:y:2025:i:2-3:p:406-433
    DOI: 10.1177/00220027241228184
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/00220027241228184
    Download Restriction: no
    File URL: https://libkey.io/10.1177/00220027241228184?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Modhurima Moitra & Nishali K Patel & Ian Cogswell & Dweep I Chanana & Emilie Maddison & Kyle Simpson & Hayley Stutzman & Yingxi Zhao & Golsum Tsakalos & Joseph Dieleman & Angela E Micah, 2022. "Tracking development assistance for health from India to low- and middle-income countries, 2009–2020," PLOS ONE, Public Library of Science, vol. 17(12), pages 1-15, December.
    2. Perrotta Berlin, Maria & Lvovkskyi, Lev, 2025. "Russia’s Involvement on the African Continent and its Consequences for Development: The Aid Channel," SITE Working Paper Series 64, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    3. Lukas Wellner & Axel Dreher & Andreas Fuchs & Bradley C. Parks & Austin Strange, 2025. "Can Aid Buy Foreign Public Support? Evidence from Chinese Development Finance," Economic Development and Cultural Change, University of Chicago Press, vol. 73(2), pages 523-578.
    4. Olivier Najar, & Pascale Scapecchi & et Ysaline PADIEU, 2022. "Fragmentation et diversification du financement du développement : les cas de la Chine, de l’Inde et de la Turquie," Working Paper 81567fdf-0daf-470c-9844-f, Agence française de développement.
    5. Olivier Najar, & Pascale Scapecchi & et Ysaline PADIEU, 2023. "Development finance fragmentation and diversification: the case of China, India and Türkiye," Working Paper 81567fdf-0daf-470c-9844-f, Agence française de développement.
    6. Bunte, Jonas B. & Kinne, Brandon J., 2025. "Strategic interdependence in sovereign lending," European Journal of Political Economy, Elsevier, vol. 89(C).
    7. Lauren Ferry & Cleo O’Brien-Udry, 2025. "The possibilities and limits of international status: Evidence from foreign aid and public opinion," The Review of International Organizations, Springer, vol. 20(4), pages 711-740, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jocore:v:69:y:2025:i:2-3:p:406-433. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://pss.la.psu.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.