A Numerical Simulation Analysis Framework of Sustainable Regional Economic Cooperation: A Case Study of the New Silk Road Economic Belt

Jue Wang, Shi Wang, Hua Wang and Yan Song
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Jue Wang: International Business School, Shaanxi Normal University, Xi’an 710119, China
Shi Wang: Institute of Area Studies, Xi’an International Studies University, Xi’an 710128, China
Hua Wang: School of Foreign Studies, Xi’an Jiaotong University, Xi’an 710049, China
Yan Song: Sino-Danish College, University of Chinese Academy of Sciences, Beijing 100049, China

Sustainability, 2022, vol. 14, issue 10, 1-18

Abstract: This paper divides the Silk Road Economic Belt into four regions. Based on the economic characteristics of these regions, the authors construct a regional equilibrium gravity model with a multilateral resistance variable. The results of the theoretical analysis show that China’s three measures (trade liberalization, financial assistance, and technological assistance) will lead to different trade effects and welfare effects. This paper conducts numerical simulations to analyze these effects among regions under different circumstances, and the authors confirm that the simulation results are consistent with real trade changes. The main results are: (1) Trade liberalization can greatly increase China’s exports to the four major regions, and the welfare of all regions will also increase (Simulation 1). (2) Technological cooperation and assistance can continuously improve local production technology, which in turn leads to a slight decline in China’s exports to the four major regions, but in the long run, the welfare of all regions has improved (Simulation 2). (3) The financial assistance from international institutions will increase the regional trade and welfare linearly (Simulation 3). Finally, this paper draws some conclusions based on the numerical simulation results.

Keywords: New Silk Road Economic Belt; regional cooperation effect; regional gravity model; numerical simulation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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