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Assessment of the effects of infrastructure investment under the belt and road initiative

Author

Listed:
  • Yang, Gaoju
  • Huang, Xianhai
  • Huang, Jiahui
  • Chen, Hangyu

Abstract

Based on the estimated effect of infrastructure investment on total factor productivity (TFP) enhancing and trade costs reducing, this paper uses the data from Asian Development Bank to numerically assess the effects of Asian nations' infrastructure investment under the Belt and Road Initiative within the Global Trade Analysis Project (GTAP) model, and the results show that most countries or regions' economic growth, welfare, foreign trade, and trade terms are promoted in varying degrees. However, some countries (regions) have suffered. Additionally, the existing division of labor and trade patterns between developed economies and developing countries somehow consolidated because of changes in trade. In addition, China's industrial transformation and upgrading will benefit from the infrastructure investment under the Belt and Road Initiative, namely, the traditional industries slowdown or decline and high-tech manufacturing and service industries speed up, along with the optimization of factor allocation among industries.

Suggested Citation

  • Yang, Gaoju & Huang, Xianhai & Huang, Jiahui & Chen, Hangyu, 2020. "Assessment of the effects of infrastructure investment under the belt and road initiative," China Economic Review, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:chieco:v:60:y:2020:i:c:s1043951x20300158
    DOI: 10.1016/j.chieco.2020.101418
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    References listed on IDEAS

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    More about this item

    Keywords

    The belt and road; Infrastructure investment; Total factor productivity (TFP); Trade costs;
    All these keywords.

    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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