This study incorporates business environment, foreign direct investment (FDI), and the global value chain upgrading into a unified analysis framework to unravel the effects of business environment and FDI on the Belt and Road Initiative (BRI) countries’ status elevation on the global value chain. The panel data of 112 BRI countries from 2007 to 2017 are employed for empirical tests on the trilateral relationship through the panel data regression model. The results show: (1) business environment improvement and FDI inflow significantly promote BRI countries’ status elevation on the global value chain. Business environment not only elevates BRI countries’ status on the global value chain directly, but indirectly lifts their status through the intermediate effects of FDI; (2) business environment and FDI significantly promote the status elevation on the global value chain for industries that are intensive on varied factors, especially for labor-intensive industry; (3) the test results of the panel threshold model further verify the positive effect of the business environment and FDI inflows on BRI countries’ status elevation on the global value chain.

The Special 301 Report, issued by the United States Department of State, is a list of countries of which private companies violate international intellectual property rights laws. The State Department would mediate with the listed countries on trade. This study concentrates on the relationship between the Special 301 listed countries and the international trade of the United States. Based on time series data of the absolute value of US net exports from 1973 to 2013, the findings indicate the Special 301 Report does have a positive impact on the volume of US international trade.