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Foreign direct investment and maritime transportation infrastructure: competition effects under the Belt and Road Initiative

Author

Listed:
  • Natalia Vechiu

    (CRET-LOG - Centre de Recherche sur le Transport et la Logistique - AMU - Aix Marseille Université)

  • Manish Kumar Sharma

    (IIT Kharagpur - Indian Institute of Technology Kharagpur)

Abstract

In this paper, we analyze the determinants of maritime connections, with a special focus on the importance of foreign direct investments (FDI) in improving maritime transportation networks and in restructuring them. We are also interested in how China, in particular, impacts countries' integration to global supply chains through maritime transportation. We work on a heterogeneous panel of bilateral maritime connections as measured by UNCTAD's bilateral liner shipping connectivity index, and we find evidence of a significant positive impact on bilateral FDIs as well as China's bilateral maritime connection to host countries. We also find a significant negative impact of Chinese FDIs in countries concerned by the Belt and Road Initiative (BRI): China's FDIs towards BRI countries trigger weaker bilateral maritime connections between countries, in general, be they BRI countries or not. A deeper analysis through interaction effects also show that a maritime connection with China is more beneficial to developing/poorer host countries, who see their connection to origin countries increase more as compared to developed/richer host countries.

Suggested Citation

  • Natalia Vechiu & Manish Kumar Sharma, 2024. "Foreign direct investment and maritime transportation infrastructure: competition effects under the Belt and Road Initiative," Post-Print hal-05610611, HAL.
    • Handle: RePEc:hal:journl:hal-05610611
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