This study uses country-level panel data covering 64 countries in the Belt and Road Initiative (BRI) for the period 2003â€“2015 and employs a dynamic panel system generalized method of moments (GMM) model with instrumental variable regression techniques to investigate empirically the impact of Chinaâ€™s outward foreign direct investment (OFDI) on trade intensity with BRI countries. The study finds that Chinaâ€™s OFDI on average has a positive impact on import intensity and a negative impact on export intensity with BRI countries. However, the impact of Chinaâ€™s OFDI on its trade intensity with BRI countries varies by country groups of resource-rich, high-income, and low-income countries in different periods. The regression results for different periods show that since the BRI was launched in 2013, Chinaâ€™s OFDI has strengthened bidirectional trade relations between China and BRI countries.
|Journal||Emerging Markets Finance and Trade|
|Publication status||Published - 2021|