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

Gaoju Yang, Xianhai Huang, Jiahui Huang and Hangyu Chen

China Economic Review, 2020, vol. 60, issue C

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.

Keywords: The belt and road; Infrastructure investment; Total factor productivity (TFP); Trade costs (search for similar items in EconPapers)
JEL-codes: F17 F62 O47 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:60:y:2020:i:c:s1043951x20300158

DOI: 10.1016/j.chieco.2020.101418

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