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Trade development between China and countries along the Belt and Road: A spatial econometric analysis based on trade competitiveness and complementarity

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  • Jiyong Chen
  • Dabo Chen
  • Aiping Yao

Abstract

This paper empirically analyses the effect of trade competitiveness and complementarity on the trade development between China and the countries along the Belt and Road (B&R). The study first measures the trade competitiveness and the complementarity between China and the countries along the B&R by using the trade competitiveness coefficient (TCC) and the trade complementarity index (TCI). Then a spatial gravity model is constructed to analyse the effect of trade competitiveness and complementarity on trade development between China and the countries along the B&R. We use generalized method of moments (GMM) and spatial filtering technology to verify the robustness of the model. The results show that the GDP of China and the countries along the B&R, the land area of countries along the B&R, trade complementarity, common language, free trade agreements (FTA), and the B&R Initiative significantly promote the trade development between China and the countries along the B&R, whereas the geographical distance between countries and trade competitiveness significantly inhibit it. Finally, to promote the trade development between China and the countries along the B&R, the present paper puts forward suggestions including improving trade promotion policies between China and the countries along the B&R and vigorously expanding cooperation with complementary industries in the countries along the B&R to enhance trade dependence.

Suggested Citation

  • Jiyong Chen & Dabo Chen & Aiping Yao, 2020. "Trade development between China and countries along the Belt and Road: A spatial econometric analysis based on trade competitiveness and complementarity," Pacific Economic Review, Wiley Blackwell, vol. 25(2), pages 205-227, May.
    • Handle: RePEc:bla:pacecr:v:25:y:2020:i:2:p:205-227
    DOI: 10.1111/1468-0106.12329
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    2. Shuhao Zhao & Tianao Chang & Yumo Ni & Ping Zhou, 2023. "An Empirical Study of Trade in Goods between China and Brazil: Analysis of Competitiveness and Complementarity," Economies, MDPI, vol. 11(9), pages 1-16, September.
    3. Tianbo Wu & Dan Zhou & Hao Cheng & Keqiu Zhang & Yihao Jiang, 2023. "Research on the Policy Effects and Impact Mechanisms of the Belt and Road Initiative on China’s Forest Products Trade," Sustainability, MDPI, vol. 15(12), pages 1-17, June.
    4. Hannes Thees, 2020. "Towards Local Sustainability of Mega Infrastructure: Reviewing Research on the New Silk Road," Sustainability, MDPI, vol. 12(24), pages 1-35, December.
    5. Roni Bhowmik & Yuhua Zhu & Kuo Gao, 2021. "An analysis of trade cooperation: Central region in China and ASEAN," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-25, December.
    6. Rui Liu & Xiaohua Tang & Cuiming Zhao & Zifan Shen & Ru Li & Jiangang Yu, 2024. "Research on the International Competitiveness and Sustainable Trade Development of the Key Equipment and Components of China’s High-Speed Rail," Sustainability, MDPI, vol. 16(16), pages 1-17, August.
    7. C.T. Vidya, 2024. "Dynamics of Trade Characteristics, Competition Networks, and Trade Fragility in ASEAN Economies," Working Papers DP-2023-27, Economic Research Institute for ASEAN and East Asia (ERIA).
    8. Sha Fan, 2023. "Does the Belt and Road Initiative Promote Bilateral Trade? An Empirical Analysis of China and the Belt and Road Countries," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 15(2), pages 190-214, May.
    9. Wang, Hui & Si, Ieongcheng & Chen, Zhihua, 2024. "Does the Belt and Road Initiative promote China and the countries along the route to reconstruct the global value chain? Evidence from value-added trade," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 63-83.
    10. Qian, Xinbei & Huang, Liangxiong & Wang, Xianbin & Wang, Shuqi, 2022. "Detecting pivotal countries of China's OFDI in the “Belt and Road” initiative: The perspective of similarity of doing business," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 296-311.
    11. Lianyue Feng & Helian Xu & Gang Wu & Wenting Zhang, 2021. "Service trade network structure and its determinants in the Belt and Road based on the temporal exponential random graph model," Pacific Economic Review, Wiley Blackwell, vol. 26(5), pages 617-650, December.
    12. Wang, Chao & Huang, Xia & Hu, Xiaoqian & Zhao, Longfeng & Liu, Chao & Ghadimi, Pezhman, 2021. "Trade characteristics, competition patterns and COVID-19 related shock propagation in the global solar photovoltaic cell trade," Applied Energy, Elsevier, vol. 290(C).

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