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Five Stylized Facts on Belt and Road Countries and Their Trade Patterns

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  • Kaku Attah Damoah
  • Giorgia Giovannetti
  • Enrico Marvasi

Abstract

The Belt and Road Initiative (BRI) offers investment opportunities for several Eurasian countries but not all of them attract investments in the same way. This paper investigates the geographical distribution of BRI projects completed between 2013 and 2020. The analysis shows that pre‐existing trade patterns are related to the likelihood of a country receiving completed BRI projects. We single out and provide evidence in support of five stylized facts. First, BRI countries with completed projects tend to be poorer and larger. Second, projects are more likely to occur in countries with intense intermediate trade with China. Third, the countries that received projects have more diversified export structures and their sectoral specialization overlaps with that of China. Fourth, among middle‐high‐income countries, the allocation of projects tends to favor those with high levels of intra‐industry trade. Fifth, among BRI countries with projects, the complexity or sophistication of the goods traded increases faster with income. These findings suggest that fostering trade integration has direct benefits and may also contribute to further BRI investments.

Suggested Citation

  • Kaku Attah Damoah & Giorgia Giovannetti & Enrico Marvasi, 2023. "Five Stylized Facts on Belt and Road Countries and Their Trade Patterns," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 149-181, January.
    • Handle: RePEc:bla:chinae:v:31:y:2023:i:1:p:149-181
    DOI: 10.1111/cwe.12462
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    3. Ligang Song & Yixiao Zhou, 2023. "Guest Editors' Words," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 1-4, January.
    4. Kai A. Konrad, 2023. "The Geoeconomics of Trade Infrastructure and the Innovation Competition between China and the US," Working Papers tax-mpg-rps-2023-14, Max Planck Institute for Tax Law and Public Finance.

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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