Construction of the Belt and Road Trade Cooperation Network from the Multi-Distances Perspective

Abstract

Based on the cooperation network formation theory, a Belt and Road trade cooperation network was constructed from the multi-distances perspective under the backdrop of the Belt and Road initiative. The geographic, factor endowment, cultural, and institutional distances were selected as variables from the aspects of geography, economy, culture, and politics to expand the gravity model. With this model, an empirical test was conducted using the data from China's export trade flows to Belt and Road countries from 2007 to 2016. The results showed that a Belt and Road country had greater trade flows from China when it had smaller geographic, factor endowment, and cultural distance and greater institutional distance from China. Based on the empirical results, we improved the comprehensive index method to measure the comprehensive distance indices between China and the Belt and Road countries. According to the comprehensive distance indices, these countries could be divided into four cooperation circles, in which the prioritized countries in the different phases were identified. Subsequently, the cooperation network construction was designed in four stages to gradually build an all-round, multi-level, and all-encompassing trade cooperation network between China and the Belt and Road countries. Eventually, based on the above consideration, policy suggestions are provided for the construction of such a network.

Harmony in Diversity: Can the One Belt One Road Initiative Promote China’s Outward Foreign Direct Investment?

“…Following the above discussion, the log-linear ordinary least square (OLS) estimation based on an expanded gravity model for determinants of China's OFDI [10,54] was written as…”

“…From Hofstede's six-dimension culture dataset on the Hofstede-insights website, Chinese culture is highly unequal (pdi = 80), more collective (idv = 20), highly masculine (mas = 66), uncertainty tolerant (uai = 30), long-term oriented (lts = 87), and very restricted (inr = 24). We measured the cultural distance index (cd) by extending the Kogut and Singh's [53] model (also Fu et al [54])…”

Trade Agreements and Global Value Chains: New Evidence from China’s Belt and Road Initiative

“…With both vertical and horizontal spillovers effects of China's TAs, developing countries can benefit even more from the partnership with China. Fu et al [34] also argue that for the countries more like China, economic cooperation should have priority while for those countries much different from China, the starting point should be cultural exchanges and institutional development. It is consistent with our results of less significant effect of TAs with more developed countries than with developing countries.…”

“…Huang [33] points out that the OBOR initiative has become a Chinese national strategy to sustain its economic growth by developing closer cooperation with China's partner countries and transforming into the next stage of sustainable development. Fu et al [34] study the construction of the trade cooperation network with the Belt and Road countries and find that, as a "strengthening China by trade" strategy for sustainable development, the OBOR initiative is of great significance for China to deepen its trade cooperation with the Belt and Road countries. Kang et al [20] argue that the OBOR initiative itself is a sustainable continuation and development of the long tradition of economic, institutional, and cultural convergence with the OBOR countries.…”

Has the Belt and Road Initiative Brought New Opportunities to Countries Along the Routes to Participate in Global Value Chains?

“…It is essential to research the effect of systemic BRI that involves trade, investment, and other aspects of participation in GVCs. Scholars have conducted extensive and in-depth studies on the impacts of BRI, and they consider that BRI has significant effects on the cooperation of BR countries (Fu et al, 2018;W. D. Wang & Picciau, 2018) and all types of investment in BR countries (Du & Zhang, 2018;.…”