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Does India Use Development Finance to Compete With China? A Subnational Analysis

Author

Listed:
  • Gerda Asmus-Bluhm
  • Vera Z. Eichenauer
  • Andreas Fuchs
  • Bradley Parks

Abstract

China and India increasingly provide aid and credit to developing countries. This article explores whether India uses these financial instruments to compete for geopolitical and commercial influence with China. We build a new geocoded dataset of Indian government-financed projects in the Global South between 2007 and 2014 and combine it with data on Chinese government-financed projects. Our regression results for 2,333 provinces within 123 countries demonstrate that India’s Exim Bank is significantly more likely to locate a project in a given jurisdiction if China provided government financing there in the previous year. Since this effect is more pronounced in countries where India is more popular relative to China and where both lenders have a similar export structure, we interpret this as evidence of India competing with China. By contrast, we do not find evidence that China uses official aid or credit to compete with India through co-located projects.

Suggested Citation

  • Gerda Asmus-Bluhm & Vera Z. Eichenauer & Andreas Fuchs & Bradley Parks, 2025. "Does India Use Development Finance to Compete With China? A Subnational Analysis," Journal of Conflict Resolution, Peace Science Society (International), vol. 69(2-3), pages 406-433, March.
    • Handle: RePEc:sae:jocore:v:69:y:2025:i:2-3:p:406-433
    DOI: 10.1177/00220027241228184
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