How free trade agreement affects the success of China's Belt and Road infrastructure projects

Hu, Beibei; Jin, Yang; Wang, Kai

doi:10.1002/ise3.32

Cited by 3 publications

(1 citation statement)

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“…Büthe and Milner (2014) analyzed data on FDI flows to 122 countries from 1971-2007 and found that PTAs with strict investment and dispute settlement provisions increase FDI among member countries, whereas agreements without such provisions do not affect investment. Similar conclusions were drawn by Hu et al (2022), who found that FTA with investment protocols improves the success rate of China's investment in the countries along the Belt and Road. Analyzing the bilateral FDI stock from 34 OECD countries to 45 ACP countries for the period of 2000, Gounder et al (2019 found that RTAs do not significantly affect FDI in the Caribbean, whereas in Africa, such effect is also largely dependent on the signing of bilateral investment agreements.…”

Section: Literature Reviewsupporting

confidence: 81%

Investment effect of regional trade agreements: an analysis from the perspective of heterogeneous agreement provisions

Yue

Lin

2023

Humanit Soc Sci Commun

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Global regional trade agreements (RTAs) are experiencing unprecedented rapid development in terms of number and content of provisions, and China’s RTAs are no exception. With the increase in the depth of RTA provisions, as an important form of economic and trade relations between countries, investment is bound to be affected. Taking the RTAs signed by China as the research object and using the bilateral foreign direct investment (FDI) data provided by the International Monetary Fund CDIS database and the relevant data from the World Bank RTA text depth database, this paper constructs various indexes to measure the depth of RTA provisions and analyzes the effects of changes in the depth of RTA provisions on inward FDI stocks to China. The study finds that the improvement of all four depth indexes, namely, total depth, core depth, depth of WTO+ provisions, and depth of WTO-X provisions, significantly promotes China’s inward FDI stocks. This conclusion still holds after a series of endogenous problem analysis and robustness tests. Further analysis shows that the improvement of the depth of RTA provisions has a relatively greater effect on FDI stocks from developing countries and countries along the “Belt and Road”. At the same time, there exists significant heterogeneity in the effects of different RTA provisions on the FDI stocks. The insights that we obtain in this paper enable us to provide policy recommendations for the construction of China’s global high-standard free trade agreement (FTA) network.

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Section: Literature Reviewsupporting

confidence: 81%