Trade Effects of the New Silk Road

Suprabha Baniya, Siobhan Murray, Nadia Rocha and Michele Ruta

No 333010, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper takes a first look at the trade effects of China’s Belt and Road Initiative (BRI), also referred to as the New Silk Road, on the 65 countries potentially involved. The pillar of the initiative consists of a number of infrastructure investment projects to improve the land and maritime transportation in the BRI region. We first use geo-referenced data and geographical information systems (GIS) analysis to compute the bilateral time to trade before and after the Belt and Road Initiative. Then, we estimate the effect of improvement in bilateral timeliness to trade on bilateral export values and on trade patterns using a gravity model and a comparative advantage model similar to Nunn (2007). We use physical geography features of transit countries as instruments of bilateral trade time to address the endogeneity between trade and infrastructure. We find that (i) the BRI would have sizeable effects on trade flows among participating countries; (ii) these effects would be magnified if deeper trade agreements complement the upgrading in transport infrastructure; (iii) products that use time sensitive inputs, and countries that are highly exposed to the new infrastructure and that are integrated in the global production chains have larger trade gains. Keywords: Belt and Road Initiative, Transport Infrastructure, GIS Analysis, Trade Flows, Time Sensitivity, Input-output Linkages

Keywords: International; Development (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/333010/files/9023.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333010

Access Statistics for this paper

More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().