The Belt and Road Initiative’s effect on supply-chain trade: evidence from structural gravity equations

Tristan Kohl

Cambridge Journal of Regions, Economy and Society, 2019, vol. 12, issue 1, 77-104

Abstract: This article considers the effect of China’s Belt and Road Initiative on supply-chain trade for 64 economies in the period 2002–2011. We employ a structural gravity equation to estimate the impact of trade-cost reducing measures—notably infrastructural improvements and the creation of free trade agreements—on supply-chain trade and welfare in general equilibrium. We find that infrastructural investments will yield asymmetric benefits to China, Russia and Southeast Asian countries stemming from greater European market access. Our results also suggest that China’s alternatives to foster (inter)regional economic growth through the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership offer much less attractive economic prospects.

Keywords: China; Belt and Road Initiative; free trade agreements; infrastructure; gravity model; trade predictions (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (22)

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Cambridge Journal of Regions, Economy and Society is currently edited by Judith Clifton, Anna Davies, Betsy Donald, Emil Evenhuis, Stefania Fiorentino (Associate Editor), Harry Garretsen, Meric Gertler, Amy Glasmeier, Mia Gray, Robert Hassink, Dieter Kogler, Michael Kitson, Linda Lobao, Charles van Marrewijk, Ron Martin, Peter Sunley, Peter Tyler and Chun Yang

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