IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v81y2024icp63-83.html
   My bibliography  Save this article

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

Author

Listed:
  • Wang, Hui
  • Si, Ieongcheng
  • Chen, Zhihua

Abstract

The current global value chain's (GVC) inequalities impede sustainable development in China and countries along the route (B&R countries), but the Belt and Road Initiative (BRI) fosters mutual economic cooperation, offering an opportunity to deepen bilateral value chain cooperation and reconstruct GVC. Existing literature suggests that under BRI, GVC reconstruction between China and B&R countries is feasible and necessary, yet empirical evidence on BRI's impact and pathways is scarce. Treating this as a quasi-natural experiment, we analyse data from 54 countries (2007-2021) using a Difference-in-Differences approach. Results show that BRI significantly promotes GVC reconstruction between China and B&R countries, with effects strengthening over time. Moreover, the BRI's promotion effects are more pronounced for GVC reconstruction between China and Asian countries along the route and B&R countries with middle-low- & middle-high-incomes. Expanding bilateral trade, enhancing capacity cooperation, and improving infrastructure connectivity are key mechanisms through which BRI drives GVC reconstruction.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:ecanpo:v:81:y:2024:i:c:p:63-83
    DOI: 10.1016/j.eap.2023.11.030
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592623003119
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2023.11.030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Choorikkad Veeramani & Garima Dhir, 2022. "Do developing countries gain by participating in global value chains? Evidence from India," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(4), pages 1011-1042, November.
    2. Pol Antras & Davin Chor & Thibault Fally & Russell Hillberry, 2012. "Measuring the Upstreamness of Production and Trade Flows," American Economic Review, American Economic Association, vol. 102(3), pages 412-416, May.
    3. Lingduo Jiang & Guofeng Zhang & Hang Zhang, 2023. "The role of the Belt and Road Initiative: New opportunity for Chinese exporters?," The World Economy, Wiley Blackwell, vol. 46(6), pages 1609-1647, June.
    4. Julian Donaubauer & Alexander Glas & Birgit Meyer & Peter Nunnenkamp, 2018. "Disentangling the impact of infrastructure on trade using a new index of infrastructure," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(4), pages 745-784, November.
    5. Salim, Ali & Razavi, Mohammad Reza & Afshari-Mofrad, Masoud, 2017. "Foreign direct investment and technology spillover in Iran: The role of technological capabilities of subsidiaries," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 207-214.
    6. repec:bla:econom:v:41:y:1974:i:162:p:176-93 is not listed on IDEAS
    7. Mari Pangestu & Lili Yan Ing, 2016. "ASEAN: Regional Integration and Reforms," Asian Economic Papers, MIT Press, vol. 15(2), pages 44-60, Summer.
    8. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    9. Keijser, Charlotte & Belderbos, René & Goedhuys, Micheline, 2021. "Governance and learning in global, regional, and local value chains: The IT enabled services industry in South Africa," World Development, Elsevier, vol. 141(C).
    10. Zhenhua Chen & Xinmeng Li, 2021. "Economic impact of transportation infrastructure investment under the Belt and Road Initiative," Asia Europe Journal, Springer, vol. 19(1), pages 131-159, December.
    11. Siyu Wang & Zhongze Chang & Xi Zhang, 2022. "The Belt and Road Initiatives and the growth of total factor productivity: based on the perspective of the regional import of intermediate goods," Empirical Economics, Springer, vol. 63(4), pages 1915-1946, October.
    12. Bala Ramasamy & Matthew C. H. Yeung, 2019. "China's one belt one road initiative: The impact of trade facilitation versus physical infrastructure on exports," The World Economy, Wiley Blackwell, vol. 42(6), pages 1673-1694, June.
    13. David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier," American Economic Review, American Economic Association, vol. 103(7), pages 2935-2959, December.
    14. 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.
    15. Song, Yiru & Yu, Chunjiao & Hao, Lulu & Chen, Xi, 2021. "Path for China's high-tech industry to participate in the reconstruction of global value chains," Technology in Society, Elsevier, vol. 65(C).
    16. Yue Lu & Wei Gu & Ka Zeng, 2021. "Does the Belt and Road Initiative Promote Bilateral Political Relations?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(5), pages 57-83, September.
    17. Ge, Ying & Dollar, David & Yu, Xinding, 2020. "Institutions and participation in global value chains: Evidence from belt and road initiative," China Economic Review, Elsevier, vol. 61(C).
    18. Haihong Gao & Yingting Li, 2020. "The Renminbi as a Trading Currency: Evidence from Selected Countries Participating in the Belt and Road Initiative," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(5), pages 45-63, September.
    19. Rebecca Freeman & Samuel Pienknagura, 2019. "Are all trade agreements equal? The role of distance in shaping the effect of economic integration agreements on trade flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(2), pages 257-285, May.
    20. Ma, Shengnan, 2022. "Growth effects of economic integration: New evidence from the Belt and Road Initiative," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 753-767.
    21. Razzaq, Asif & An, Hui & Delpachitra, Sarath, 2021. "Does technology gap increase FDI spillovers on productivity growth? Evidence from Chinese outward FDI in Belt and Road host countries," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    22. Aleksandra Kordalska & Magdalena Olczyk, 2023. "Upgrading low value-added activities in global value chains: a functional specialisation approach," Economic Systems Research, Taylor & Francis Journals, vol. 35(2), pages 265-291, April.
    23. Tania Ghossein & Bernard Hoekman & Anirudh Shingal, 2021. "Public Procurement, Regional Integration, and the Belt and Road Initiative [How China Got Sri Lanka to Cough Up a Port]," The World Bank Research Observer, World Bank, vol. 36(2), pages 131-163.
    24. Cheng, Leonard K., 2016. "Three questions on China's “Belt and Road Initiative”," China Economic Review, Elsevier, vol. 40(C), pages 309-313.
    25. Kexuan Zhou & Sanjay Kumar & Futao Lu & Qiaoyun Fang & Linhui Yu, 2022. "Has the Belt and Road Initiative Improved the Quality of Food Imported by Chinese Enterprises?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(2), pages 60-83, March.
    26. Chen-Yu Li & An-Chi Lai & Zhan-Ao Wang & Yi-Chung Hsu, 2019. "The preliminary effectiveness of bilateral trade in China’s belt and road initiatives: a structural break approach," Applied Economics, Taylor & Francis Journals, vol. 51(35), pages 3890-3905, July.
    27. Zijie Fan & Siyi Peng & Wenjie Hu, 2023. "How Does the Regional Comprehensive Economic Partnership Affect the Restructuring of Global Value Chains?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(3), pages 140-172, May.
    28. Yahui Chen & Charles van Marrewijk & Changsheng Xu & Congmin Zuo, 2022. "Does the Belt and Road Initiative affect the business environment of participating countries?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 27(3), pages 425-444, July.
    29. Kong, Qunxi & Chen, Afei & Shen, Chenrong & Wong, Zoey, 2021. "Has the Belt and Road Initiative improved the quality of economic growth in China's cities?," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 870-883.
    30. Rasoulinezhad, Ehsan & Sung, Jinsok & Talipova, Amina & Taghizadeh-Hesary, Farhad, 2022. "Analyzing energy trade policy in Central Asia using the intercountry trade force approach," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 441-454.
    31. Milberg, William & Winkler, Deborah, 2010. "Trade crisis and recovery : restructuring of global value chains," Policy Research Working Paper Series 5294, The World Bank.
    32. Manzoor Ahmad & Shoukat Iqbal Khattak & Shehzad Khan & Zia Ur Rahman, 2020. "Do aggregate domestic consumption spending & technological innovation affect industrialization in South Africa? An application of linear & non-linear ARDL models," Journal of Applied Economics, Taylor & Francis Journals, vol. 23(1), pages 44-65, January.
    33. Haiou Mao & Guanchun Liu & Chengsi Zhang & Rao Muhammad Atif, 2019. "Does Belt and Road Initiative Hurt Node Countries? A Study from Export Perspective," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(7), pages 1472-1485, May.
    34. He, Yaxing & Huo, Weidong & Yu, Jie, 2023. "Tracing the regional dual value chains: Measurement on the production position and evidence from China," Journal of Asian Economics, Elsevier, vol. 85(C).
    35. Giulia Brancaccio & Myrto Kalouptsidi & Theodore Papageorgiou, 2020. "Geography, Transportation, and Endogenous Trade Costs," Econometrica, Econometric Society, vol. 88(2), pages 657-691, March.
    36. Chen, Victor Zitian & Li, Jing & Shapiro, Daniel M., 2012. "International reverse spillover effects on parent firms: Evidences from emerging-market MNEs in developed markets," European Management Journal, Elsevier, vol. 30(3), pages 204-218.
    37. Shuzhong Ma & Mengheng Liu, 2020. "Spatial correlation effect of China's outward foreign direct investment in countries along the One Belt and One Road," Pacific Economic Review, Wiley Blackwell, vol. 25(2), pages 228-249, May.
    38. Yaya Li & Yongli Li & An Pan & Xue Pan & Eleonora Veglianti, 2022. "The Network Structure Characteristics and Determinants of the Belt & Road Industrial Robot Trade," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(5), pages 1491-1501, April.
    39. Jin, Gang & Shen, Kunrong & Jiang, Yue, 2021. "Does the Belt and Road Initiative cause more troubled Chinese overseas investments?," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 217-232.
    40. Baniya, Suprabha & Rocha, Nadia & Ruta, Michele, 2020. "Trade effects of the New Silk Road: A gravity analysis," Journal of Development Economics, Elsevier, vol. 146(C).
    41. Edward J. Balistreri & David G. Tarr & Hidemichi Yonezawa, 2015. "Deep Integration in Eastern and Southern Africa: What are the Stakes?," Journal of African Economies, Centre for the Study of African Economies, vol. 24(5), pages 677-706.
    42. Yang, Yiwen & Lin, Chinho, 2021. "Impact of the “Belt and Road Initiative” on machinery production networks," Economic Modelling, Elsevier, vol. 104(C).
    43. Wang, Mengjiao & Liu, Jianxu & Rahman, Sanzidur & Sun, Xiaoqi & Sriboonchitta, Songsak, 2023. "The effect of China’s outward foreign direct investment on carbon intensity of Belt and Road Initiative countries: A double-edged sword," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 792-808.
    44. Yu, Linhui & Zhao, Dan & Niu, Haixia & Lu, Futao, 2020. "Does the belt and road initiative expand China's export potential to countries along the belt and road?," China Economic Review, Elsevier, vol. 60(C).
    45. 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.
    46. Hao Chen & Jiadong Pan & Wen Xiao, 2020. "Chinese Outward Foreign Direct Investment and Industrial Upgrading from the Perspective of Differences among Countries," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(3), pages 1-28, May.
    47. HaiYue Liu & YiXian Li & Rui Yang & XiaoPing Li, 2021. "How Do Chinese Firms Perform Before and After Cross-Border Mergers and Acquisitions?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(2), pages 348-364, January.
    48. Kaplinsky, Raphael & Terheggen, Anne & Tijaja, Julia, 2011. "China as a Final Market: The Gabon Timber and Thai Cassava Value Chains," World Development, Elsevier, vol. 39(7), pages 1177-1190, July.
    49. Koffi Dumor & Li Yao & Jean-Paul Ainam & Edem Koffi Amouzou & Williams Ayivi, 2021. "Quantitative Dynamics Effects of Belt and Road Economies Trade Using Structural Gravity and Neural Networks," SAGE Open, , vol. 11(3), pages 21582440211, July.
    50. Bai, Dongbei & Hu, Jin & Irfan, Muhammad & Hu, Mingjun, 2023. "Unleashing the impact of ecological civilization pilot policies on green technology innovation: Evidence from a novel SC-DID model," Energy Economics, Elsevier, vol. 125(C).
    51. Andr� C Jordaan, 2014. "The impact of trade facilitation factors on South Africa's exports to a selection of African countries," Development Southern Africa, Taylor & Francis Journals, vol. 31(4), pages 591-605, July.
    52. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.
    53. Hong Liu & Kong Yam Tan & Guanie Lim, 2021. "Introduction — Southeast Asia And The Belt And Road Initiative: The Political Economy Of Regionalism, Trade, And Infrastructure," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 66(01), pages 1-20, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ying Li & Ying Cheng, 2024. "A Risk Management Strategy under Transfer Pricing for Multi-National Supply Chain along the Belt and Road Initiative," Sustainability, MDPI, vol. 16(17), pages 1-24, September.
    2. Chuanrong Huang & Xiyue Zhu, 2024. "The Impact of Global Value Chain Reconstruction on the Innovative Latitude High-Quality Development of Reverse OFDI in China—From the Perspective of Jiangsu Province," Sustainability, MDPI, vol. 16(16), pages 1-25, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hui Wang & Xin Zhong, 2023. "An Empirical Study on the Impact of Chinese OFDI on the Global Value Chain Positions of Countries Along the Belt and Road and Threshold Effects," SAGE Open, , vol. 13(1), pages 21582440231, February.
    2. 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.
    3. Nugent, Jeffrey B. & Lu, Jiaxuan, 2021. "China's outward foreign direct investment in the Belt and Road Initiative: What are the motives for Chinese firms to invest?," China Economic Review, Elsevier, vol. 68(C).
    4. Bian, Ruimin & Fan, Zhaobin, 2024. "Digitalization of services, Innovation and manufacturing GVC upstreamness," Technology in Society, Elsevier, vol. 78(C).
    5. Xuejun Wang & Rongrong Cui & Xi Tian & Jiarong Qian, 2023. "The Belt and Road initiative and food consumption in countries along the route," Agribusiness, John Wiley & Sons, Ltd., vol. 39(S1), pages 1624-1646, December.
    6. Koffi Dumor & Li Yao & Jean-Paul Ainam & Edem Koffi Amouzou & Williams Ayivi, 2021. "Quantitative Dynamics Effects of Belt and Road Economies Trade Using Structural Gravity and Neural Networks," SAGE Open, , vol. 11(3), pages 21582440211, July.
    7. Koffi Dumor & Yao Li & Ma Yongkai & Enock Mintah Ampaw & Hafez Komla Dumor, 2022. "Evaluating the belt and road initiative effects on trade and migration: Evidence from the East African community," African Development Review, African Development Bank, vol. 34(1), pages 16-28, March.
    8. Kamalbek Karymshakov & Burulcha Sulaimanova, 2021. "The impact of infrastructure on trade in Central Asia," Asia Europe Journal, Springer, vol. 19(1), pages 5-20, December.
    9. Nenci, Silvia & Fusacchia, Ilaria & Giunta, Anna & Montalbano, Pierluigi & Pietrobelli, Carlo, 2022. "Mapping global value chain participation and positioning in agriculture and food: stylised facts, empirical evidence and critical issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2), July.
    10. Jiansuo Pei & Gaaitzen de Vries & Meng Zhang, 2022. "International trade and Covid‐19: City‐level evidence from China's lockdown policy," Journal of Regional Science, Wiley Blackwell, vol. 62(3), pages 670-695, June.
    11. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    12. Amador, João & Cabral, Sónia, 2014. "Global value chains: surveying drivers and measures," Working Paper Series 1739, European Central Bank.
    13. Jianhong Qi & Kam Ki Tang & Da Yin & Yong Zhao, 2020. "Remaking China’s Global Image with the Belt and Road Initiative: Is the Jury Out?," Discussion Papers Series 635, School of Economics, University of Queensland, Australia.
    14. Holger Görg & Haiou Mao, 2022. "Does the belt and road initiative stimulate Chinese exports? Evidence from micro data," The World Economy, Wiley Blackwell, vol. 45(7), pages 2084-2100, July.
    15. Cai, Xiang & Zhao, Xiaohui & Jiang, Cuiting & Zhang, Liguo, 2024. "China's foreign direct investments: Do they promote domestic green technology?," Journal of Policy Modeling, Elsevier, vol. 46(1), pages 60-74.
    16. Lingduo Jiang & Guofeng Zhang & Hang Zhang, 2023. "The role of the Belt and Road Initiative: New opportunity for Chinese exporters?," The World Economy, Wiley Blackwell, vol. 46(6), pages 1609-1647, June.
    17. Joaquin Blaum & Federico Esposito & Sebastian Heise, 2025. "Input Sourcing Under Supply Chain Risk: Evidence from U.S. Manufacturing Firms," Staff Reports 1141, Federal Reserve Bank of New York.
    18. Ouyang, Shanshan & Li, Yanxi & Wu, Haowen & Zhao, Heng & Xu, Runxiang, 2023. "Structure and evolution of the greenfield FDI network along the belt and road," Research in International Business and Finance, Elsevier, vol. 64(C).
    19. Zhong, Zhangqi & Guo, Zhifang & Zhang, Jianwu, 2021. "Does the participation in global value chains promote interregional carbon emissions transferring via trade? Evidence from 39 major economies," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    20. Montalbano, Pierluigi & Nenci, Silvia, 2022. "Does global value chain participation and positioning in the agriculture and food sectors affect economic performance? A global assessment," Food Policy, Elsevier, vol. 108(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:81:y:2024:i:c:p:63-83. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.