IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i23p10512-d1533559.html
   My bibliography  Save this article

How Does the “Belt and Road” Initiative Affect Debt Sustainability?

Author

Listed:
  • Henglong Zhang

    (School of Economics, Shanghai University, Shanghai 201800, China)

  • Yitong Jiang

    (School of Economics, Shanghai University, Shanghai 201800, China)

  • Conglei Hou

    (School of Economics, Shanghai University, Shanghai 201800, China)

Abstract

The Belt and Road Initiative (BRI) has opened new financing channels, promoting sustainable debt management and high-quality economic growth in China and BRI-participating countries. This paper, using sample data from 64 BRI-participating countries and 40 non-BRI countries from 2002–2021, employs the difference-in-differences (DiD) method to examine BRI impacts on government debt sustainability. Empirical results passing robustness tests reveal heterogeneous effects. Findings indicate: first, the BRI enhances government debt sustainability in participating countries; second, government spending, foreign direct investment, and international trade moderate economic development; third, the BRI exhibits heterogeneity by income, debt levels, and growth rates. The study demonstrates the BRI alleviates “debt anxiety” and injects new momentum into global economic governance system improvement and innovation, ensuring stable macroeconomic operation and high-quality economic growth.

Suggested Citation

  • Henglong Zhang & Yitong Jiang & Conglei Hou, 2024. "How Does the “Belt and Road” Initiative Affect Debt Sustainability?," Sustainability, MDPI, vol. 16(23), pages 1-24, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10512-:d:1533559
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/23/10512/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/23/10512/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. de Soyres, François & Mulabdic, Alen & Ruta, Michele, 2020. "Common transport infrastructure: A quantitative model and estimates from the Belt and Road Initiative," Journal of Development Economics, Elsevier, vol. 143(C).
    2. Coşar, A. Kerem & Demir, Banu, 2016. "Domestic road infrastructure and international trade: Evidence from Turkey," Journal of Development Economics, Elsevier, vol. 118(C), pages 232-244.
    3. Gian Maria Milesi-Ferretti & Assaf Razin, 1996. "Sustainability of Persistent Current Account Deficits," NBER Working Papers 5467, National Bureau of Economic Research, Inc.
    4. Giammarioli, Nicola & Nickel, Christiane & Rother, Philipp & Vidal, Jean-Pierre, 2007. "Assessing fiscal soundness: theory and practice," Occasional Paper Series 56, European Central Bank.
    5. Guo, Si & Pei, Yun & Xie, Zoe, 2022. "A dynamic model of fiscal decentralization and public debt accumulation," Journal of Public Economics, Elsevier, vol. 212(C).
    6. Helmut Reisen, 2015. "Will the AIIB and the NDB Help Reform Multilateral Development Banking?," Global Policy, London School of Economics and Political Science, vol. 6(3), pages 297-304, September.
    7. 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).
    8. Du, Julan & Zhang, Yifei, 2018. "Does One Belt One Road initiative promote Chinese overseas direct investment?," China Economic Review, Elsevier, vol. 47(C), pages 189-205.
    9. Quintos, Carmela E, 1995. "Sustainability of the Deficit Process with Structural Shifts," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(4), pages 409-417, October.
    10. Chunjiao Yu & Ren Zhang & Lian An & Zhixing Yu, 2020. "Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?," Sustainability, MDPI, vol. 12(17), pages 1-19, August.
    11. 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.
    12. Tran, Ngan, 2018. "Debt threshold for fiscal sustainability assessment in emerging economies," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 375-394.
    13. Nicola Giammarioli & Christiane Nickel & Philipp Rother & Jean-Pierre Vidal, 2007. "Assessing fiscal soundness - Theory and practice," Occasional Paper Series 56, European Central Bank.
    14. Simon Shen & Wilson Chan, 2018. "A comparative study of the Belt and Road Initiative and the Marshall plan," Palgrave Communications, Palgrave Macmillan, vol. 4(1), pages 1-11, December.
    15. Serafettin Yilmaz (Yao Shifan) & Liu Changming, 2020. "Remaking Eurasia: the Belt and Road Initiative and China-Russia strategic partnership," Asia Europe Journal, Springer, vol. 18(3), pages 259-280, September.
    Full references (including those not matched with items on IDEAS)

    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. Damoah, Kaku Attah & Giovannetti, Giorgia & Marvasi, Enrico, 2022. "Do country centrality and similarity to China matter in the allocation of belt and road projects?," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 660-674.
    2. Markus Reischmann, 2016. "Empirical Studies on Public Debt and Fiscal Transfers," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 63.
    3. 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.
    4. Cristina Di Stefano & P. Lelio Iapadre & Ilaria Salvati, 2021. "Trade and Infrastructure in the Belt and Road Initiative: A Gravity Analysis Based on Revealed Trade Preferences," JRFM, MDPI, vol. 14(2), pages 1-15, January.
    5. Wei Yang & Feihuang Xue & Jinfeng Shi & Yanmin Shao & Di Wang, 2021. "Factors Affecting the Trade Dependence Relationship of Asian Countries with China: Implications for China’s Belt and Road Initiative," Sustainability, MDPI, vol. 13(19), pages 1-23, September.
    6. Linda Calabrese & Rhys Jenkins & Lorena Lombardozzi, 2024. "The Belt and Road Initiative and Dynamics of Structural Transformation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(3), pages 515-547, June.
    7. 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).
    8. Sidong Zhao & Yiran Yan & Jing Han, 2021. "Industrial Land Change in Chinese Silk Road Cities and Its Influence on Environments," Land, MDPI, vol. 10(8), pages 1-30, July.
    9. Krishna Chaitanya Vadlamannati & Yuanxin Li & Samuel Brazys & Alexander Dukalskis, 2019. "Building Bridges or Breaking Bonds? The Belt and Road Initiative and Foreign Aid Competition," Working Papers 201906, Geary Institute, University College Dublin.
    10. Winkler, Adalbert & Geis, André & Böwer, Uwe, 2007. "Commodity price fluctuations and their impact on monetary and fiscal policies in Western and Central Africa," Occasional Paper Series 60, European Central Bank.
    11. António Afonso & José Alves & Oļegs Matvejevs & Oļegs Tkačevs, 2023. "Fiscal Sustainability and the Role of Inflation," CESifo Working Paper Series 10843, CESifo.
    12. Mayerlen, Frank & Sola, Pierre & Be Duc, Louis, 2008. "The monetary presentation of the euro area balance of payments," Occasional Paper Series 96, European Central Bank.
    13. Yang Gao, 2022. "The Belt and Road Initiative and cascading innovation in China’s domestic railway ecosystem," Journal of International Business Policy, Palgrave Macmillan, vol. 5(2), pages 236-258, June.
    14. Russo, Daniela & Caviglia, Giacomo & Papathanassiou, Chryssa & Rosati, Simonetta, 2007. "Prudential and oversight requirements for securities settlement," Occasional Paper Series 76, European Central Bank.
    15. Vita Jagric & Sebastjan Strasek & Timotej Jagric & Tanja Markovic-Hribernik, 2009. "Personal Income Tax Reforms as a Competitive Advantage," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 189-218, May.
    16. Irina Bunda, 2007. "The Changing Role of the Exchange Rate in a Globalised Economy," Post-Print halshs-00372820, HAL.
    17. 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.
    18. Mehl, Arnaud & Bussière, Matthieu, 2008. "China's and India's roles in global trade and finance: twin titans for the new millennium?," Occasional Paper Series 80, European Central Bank.
    19. González, Fernando & Coppens, François & Winkler, Gerhard, 2007. "The performance of credit rating systems in the assessment of collateral used in Eurosystem monetary policy operations," Occasional Paper Series 65, European Central Bank.
    20. Yang, Dong & Li, Lu & Notteboom, Theo, 2022. "Chinese investment in overseas container terminals: The role of investor attributes in achieving a higher port competitiveness," Transport Policy, Elsevier, vol. 118(C), pages 112-122.

    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:gam:jsusta:v:16:y:2024:i:23:p:10512-:d:1533559. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.