Growth effects of economic integration: New evidence from the Belt and Road Initiative

This paper uses the Belt and Road Initiative (B & R), an exogenous innovative model of economic integration proposed by China, to examine the growth effects of economic integration on local economies. From 2013 to 2019, more than 120 countries successively participated in the B & R, which intensified the regional integration and interdependence of B & R countries. Employing a difference-in-differences estimation methodology that exploits the cross-country, cross-time variation in the timing of participation in the Belt and Road Initiative, the author finds that the Belt and Road Initiative materially improved the economic performance of local economies, with particularly strong effects for lower income countries. This paper also provides suggestive evidence that the growth effects can be interpreted in terms of foreign trade and foreign direct investment inwards. (C)2022 Economic Society of Australia, Queensland. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).