China's New Silk Road and China-EU Trade

Chu Lo ()
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Chu Lo: Department of Agricultural Economics, National Taiwan University

Annals of Economics and Finance, 2018, vol. 19, issue 2, 683-701

Abstract: This paper develops a simple model, wherein firms choose to pay a premium for timely delivered freight since consumers place more value on goods that arrive sooner than later, to estimate the impact of China's "New Silk Road" (NSR) initiative on trade between China and Europe. We argue that if China's NSR is sufficiently realized, many time-sensitive firms that currently use maritime transport might switch to ground transport as the latter shortens transit time sharply at reasonable costs, hereby enlarging the market demands. Consequently, NSR might, ceteris paribus, increase trade between China and Europe by an additional 8% to 32%.

Keywords: One Belt One Road; New Silk Road; China; Europe (search for similar items in EconPapers)
JEL-codes: F11 F17 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2018:v:19:i:2:lo

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