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The impact of trade liberalization on China–ASEAN trade relations along the belt and road: An augmented gravity model analysis

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  • Wang, Lin
  • Chen, Kai

Abstract

While trade liberalization has become increasingly important in global economic integration, little is known about its specific impact on China–ASEAN bilateral trade relations within the Belt and Road Initiative framework, particularly regarding cultural factors. This study addresses this gap by examining how trade liberalization affects bilateral trade dynamics between China and ASEAN nations, with special attention to linguistic and religious proximity as potential moderators. Using an augmented gravity model and panel data from 2012 to 2022, we find that increased trade liberalization significantly enhances bilateral trade volumes, with stronger effects in export trade compared to imports. Moreover, shared linguistic foundations and religious beliefs amplify these positive effects, particularly in ASEAN countries with lower economic development levels. These findings provide crucial insights for policymakers seeking to strengthen regional economic integration and optimize trade cooperation strategies along the Belt and Road.

Suggested Citation

  • Wang, Lin & Chen, Kai, 2025. "The impact of trade liberalization on China–ASEAN trade relations along the belt and road: An augmented gravity model analysis," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014478
    DOI: 10.1016/j.frl.2024.106418
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    More about this item

    Keywords

    Trade liberalization; China–ASEAN relations; Belt and road initiative; Gravity model; Cultural proximity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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