The Belt and Road Initiative, sister-city partnership and Chinese outward FDI

Figures & data

Table 1. Descriptive statistics.

Variables	Mean	S. D.	Min	Max	Obs.	Source
Outflow of Chinese FDI	2.04	8.37	0	170	1692	Chinese Ministry of Commerce
Total CMA accomplishments	0.46	1.95	0	25	1692	Wind database
CMA accomplishments by SOEs	0.14	0.58	0	7	1692	Wind database
CMA accomplishments by POEs	0.35	1.65	0	26	1692	Wind database
Total CMA announcements	0.96	4.11	0	75	1692	Wind database
CMA announcements by SOEs	0.24	0.87	0	11	1692	Wind database
CMA announcements by POEs	0.72	3.73	0	73	1692	Wind database
Sister-city partnership	10.99	31.48	0	278	1692	Chinese Ministry of Foreign Affairs
Cultural distance between China and host countries	3.92	2.09	0.22	7.67	1692	Geert-Hofstede website
Duration of BRI membership	0.76	0.42	0	5	1692	Chinese Ministry of Foreign Affairs
Institutional quality of host country	0.026	0.89	−1.89	1.88	1692	World Bank
Currency exchange rate	2.58	3.61	0.01	20.96	1692	World Bank
Host country inflation rate	5.48	5.86	0.01	59.22	1692	World Bank
Log of host country population	15.25	1.72	10.49	20.07	1692	World Bank
Log of host country GDP	8.59	1.53	5.11	11.68	1692	World Bank
Log of home country GDP (China)	10.96	0.68	9.25	11.17	1692	World Bank
Log of geographic distance	8.94	0.52	6.69	9.86	1692	Google map

Source: calculated by authors.

Figure 1. Chinese outward FDI flows from 2006 to 2017.

Source: Authors’ plot based on the data from the Ministry of Commerce of the Peoples’ Republic of China.

Notes: Year is presented in the horizontal axis and the volume of Chines OFDI in the unit of hundred million USD is presented in the vertical axis. The exact numbers are not reported due to limited space in the figure but are available upon requests.

Figure 2. Number of Chinese cities twinning with their sister cities globally in 2006, 2013 and 2017.

Source: Authors’ plot based on the data from the Ministry of Foreign Affairs of the Peoples’ Republic of China by ArcGIS 10.2.

Figure 3. Number of sister-city relationships with China in 2017.

Source: Authors’ calculation based on the data from the Ministry of Foreign Affairs of the Peoples’ Republic of China by ArcGIS 10.2.

Table 2. PPML estimation for Chinese outward FDI and sister-city partnership.

	Full			Belt Road			Non-Belt Road
	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6	Model 7	Model 8	Model 9
	06-17	06-12	13-17	06-17	06-12	13-17	06-17	06-12	13-17
${SC}_{it-1}$	0.013** (0.007)	0.009* (0.005)	0.012** (0.006)	0.027*** (0.009)	0.025 (0.017)	0.019 (0.013)	0.016*** (0.005)	0.012** (0.006)	0.008 (0.005)
${\mathit{INF}}_{it}$	−0.012 (0.008)	−0.001 (0.010)	0.012 (0.012)	−0.009 (0.011)	0.008 (0.012)	0.029 (0.035)	−0.027** (0.012)	−0.019 (0.018)	−0.003 (0.016)
${\mathit{INS}}_{it}$	0.412*** (0.153)	0.382 (0.253)	0.207* (0.135)	0.215* (0.118)	−0.713 (0.442)	0.436 (0.526)	−0.018 (0.315)	−0.369 (0.409)	−0.223 (0.378)
${CD}_i$	−0.087* (0.046)	−0.103* (0.054)	0.080 (0.071)	0.088 (0.112)	0.064 (0.133)	0.059 (0.149)	0.266* (0.148)	0.313* (0.163)	0.200 (0.166)
${ER}_{it}$	0.036** (0.015)	−0.010 (0.037)	0.025 (0.041)	0.015** (0.008)	−0.006 (0.010)	0.015 (0.014)	0.033 (0.051)	0.011 (0.020)	0.017 (0.028)
$\ln {\mathit{POP}}_{it}$	0.391*** (0.068)	0.202*** (0.075)	0.355*** (0.074)	0.645*** (0.146)	0.521*** (0.164)	0.676*** (0.178)	0.518*** (0.103)	0.467*** (0.109)	0.497*** (0.113)
$\ln {\mathit{GDP}}_{it}$	0.386*** (0.108)	0.382*** (0.127)	0.231* (0.132)	0.813*** (0.191)	0.684*** (0.219)	0.339 (0.295)	1.174*** (0.174)	0.838*** (0.207)	0.592*** (0.228)
$\ln {\mathit{CGDP}}_t$	0.207* (0.137)	0.197* (0.112)	0.219* (0.130)	0.153 (0.087)	0.212* (0.132)	0.195 (0.154)	0.188* (0.107)	0.176 (0.135)	0.201** (0.097)
$\ln {\mathit{DIS}}_i$	−0.021 (0.167)	−0.727*** (0.276)	−0.658** (0.262)	−1.098** (0.499)	−1.255** (0.576)	−1.674*** (0.636)	−0.037 (0.628)	0.502 (0.658)	0.165 (0.678)
R^2	0.411	0.398	0.432	0.378	0346	0.429	0.357	0.365	0.276
Pseudo log-likelihood	−4904.19	−3141.12	−3907.57	−3774.28	−3076.91	−4141.92	−45964.01	−4234.20	−4276.18
Ramsey p-value	0.142	0.151	0.158	0.103	0.236	0.071	0.163	0.155	0.092
Observations	1551	846	705	726	396	330	825	450	375

Notes: 1. Robust standard errors are reported in parentheses; 2. *, **, *** signify statistical significance at 10%, *** 5% and * 1% level; 3. Results are conducted with the use of the STATA 14.

Source: calculated by authors.

Table 3. PPML estimations for Chinese firms’ CMA accomplishment and sister-city partnership.

	Full			Belt Road			Non-Belt Road
	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6	Model 7	Model 8	Model 9
	06-17	06-12	13-17	06-17	06-12	13-17	06-17	06-12	13-17
${SC}_{it-1}$	0.009*** (0.001)	0.011*** (0.002)	0.004*** (0.001)	0.004 (0.004)	−0.003 (0.013)	0.003 (0.006)	0.001 (0.002)	0.004*** (0.002)	−0.002 (0.002)
${\mathit{INF}}_{it}$	−0.042** (0.022)	−0.011 (0.026)	−0.113*** (0.040)	0.007 (0.033)	−0.034 (0.039)	0.080** (0.031)	−0.038 (0.054)	0.065 (0.043)	−0.108** (0.054)
${\mathit{INS}}_{it}$	0.113 (0.200)	0.213 (0.231)	0.379* (0.239)	0.262* (0.151)	0.347 (0.486)	0.751** (0.374)	0.765 (0.054)	0.231 (0.651)	−0.779 (0.585)
${CD}_i$	−0.119** (0.061)	−0.142** (0.059)	−0.152* (0.089)	−0.261** (0.122)	−0.152 (0.122)	−0.511*** (0.176)	−0.068 (0.086)	−0.111 (0.109)	−0.205 (0.135)
${ER}_{it}$	0.048*** (0.017)	0.046* (0.024)	0.054* (0.028)	−0.034 (0.038)	0.093* (0.056)	0.066 (0.066)	0.012 (0.023)	0.014 (0.030)	−0.026 (0.042)
$\ln {\mathit{POP}}_{it}$	0.485*** (0.056)	0.423*** (0.083)	0.564*** (0.077)	0.725*** (0.117)	0.887*** (0.181)	0.610*** (0.143)	0.774*** (0.084)	0.744*** (0.096)	0.907*** (0.158)
$\ln {\mathit{GDP}}_{it}$	0.312*** (0.112)	0.716*** (0.173)	0.734*** (0.186)	0.481** (0.226)	0.580* (0.338)	0.496** (0.248)	0.627** (0.312)	0.350* (0.218)	0.638*** (0.216)
$\ln {\mathit{CGDP}}_t$	0.217** (0.091)	0.357*** (0.104)	0.193* (0.126)	0.206* (0.121)	0.341*** (0.092)	0.229** (0.115)	0.319** (0.159)	0.250** (0.118)	0.176 (0.119)
$\ln {\mathit{DIS}}_i$	−0.742*** (0.117)	−0.737*** (0.169)	0.557 (0.467)	0.067 (0.229)	0.106 (0.501)	−0.404 (0.403)	−0.621* (0.368)	−0.465** (0.185)	−0.471 (0.298)
R^2	0.6453	0.6218	0.7076	0.3279	0.1962	0.5416	0.7115	0.6792	0.8711
Pseudo log-likelihood	−1116.26	−725.17	−482.07	−307.47	−159.66	−113.35	−515.15	−252.28	−172.85
Ramsey (p-value)	0.153	0.145	0.171	0.128	0.193	0.217	0.186	0.116	0.154
Observations	1551	846	705	726	396	330	825	450	375

Notes: 1. Robust standard errors are reported in parentheses; 2. *, **, *** signify statistical significance at 10%, *** 5% and * 1% level; 3. Results are conducted with the use of the STATA 14.

Source: calculated by authors.

Table 4. PPML estimations for Chinese firms’ CMA announcement and sister-city partnership.

	Full			Belt Road			Non-Belt Road
	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6	Model 7	Model 8	Model 9
	06-17	06-12	13-17	06-17	06-12	13-17	06-17	06-12	13-17
${SC}_{it-1}$	0.007*** (0.001)	0.008*** (0.002)	0.004*** (0.001)	0.004 (0.004)	−0.001 (0.010)	0.005 (0.006)	0.001 (0.001)	0.003* (0.002)	−0.003 (0.002)
${\mathit{INF}}_{it}$	−0.045** (0.020)	−0.019 (0.024)	−0.113*** (0.041)	0.007 (0.033)	−0.035 (0.039)	0.068* (0.040)	−0.057 (0.049)	0.065 (0.043)	−0.107* (0.057)
${\mathit{INS}}_{it}$	0.332 (0.226)	0.215 (0.233)	−0.379 (-1.12)	0.962** (0.451)	0.647 (0.587)	1.357** (0.555)	4.098*** (0.838)	0.072 (0.541)	−0.006 (1.128)
${CD}_i$	−0.083 (0.054)	−0.132 (0.082)	−0.152* (0.089)	−0.261** (0.122)	−0.052 (0.133)	−0.523*** (0.172)	0.008 (0.077)	−0.029 (0.110)	−0.142 (0.133)
${ER}_{it}$	0.047*** (0.015)	0.045* (0.024)	0.054* (0.028)	−0.034 (0.038)	−0.093* (0.056)	0.057 (0.057)	0.018 (0.019)	0.007 (0.028)	0.001 (0.037)
$\ln {\mathit{POP}}_{it}$	0.467*** (0.044)	0.446*** (0.083)	0.563*** (0.077)	0.725*** (0.117)	0.888*** (0.182)	0.584*** (0.129)	0.760*** (0.076)	0.739*** (0.108)	0.912*** (0.135)
$\ln {\mathit{GDP}}_{it}$	0.368*** (0.087)	0.030 (0.110)	0.734*** (0.186)	0.481** (0.226)	0.580* (0.336)	0.380 (0.253)	0.929*** (0.235)	0.547* (0.278)	0.632* (0.344)
$\ln {\mathit{CGDP}}_t$	0.261** (0.091)	0.293*** (0.102)	0.203 (0.126)	0.218* (0.131)	0.299*** (0.092)	0.186* (0.113)	0.303** (0.129)	0.250 (0.188)	0.201* (0.119)
$\ln {\mathit{DIS}}_i$	−0.538*** (0.105)	−0.617*** (0.169)	0.523 (0.467)	0.167 (0.229)	0.106 (0.500)	−0.169 (0.404)	−0.612*** (0.165)	−0.820** (0.318)	0.258 (0.344)
R^2	0.7549	0.6180	0.7076	0.3279	0.1960	0.4619	0.8192	0.6766	0.8032
Pseudo log-likelihood	−1696.88	−615.47	−482.07	−307.47	−159.66	−138.12	−681.09	−308.77	−225.43
Ramsey (p-value)	0.173	0.162	0.186	0.112	0.153	0.107	0.114	0.096	0.106
Observations	1551	846	705	726	396	330	825	450	375

Notes: 1. Robust standard errors are reported in parentheses; 2. *, **, *** denote significance at 10%, *** 5% and * 1% level, respectively; 3. Results are conducted with the use of the STATA 14.

Source: calculated by authors.

Table 5. PPML estimations for the interaction between sister-city partnership and BRI on outward FDI and CMA.

		CMA accomplishment			CMA announcement
	OFDI	Model 2	Model 3	Model 4	Model 5	Model 6	Model 7
	Model 1	Full	SOE	POE	Full	SOE	POE
${SC}_{it-1}$	0.012*** (0.004)	0.006*** (0.001)	0.001 (0.001)	0.004** (0.001)	0.007*** (0.001)	0.009*** (0.003)	0.006*** (0.001)
${\mathit{BRI}}_{it-1}$	0.482*** (0.061)	0.195* (0.111)	0.172 (0.180)	0.267* (0.138)	0.501*** (0.121)	0.272** (0.118)	0.247* (0.153)
${\mathit{BRI}}_{it-1}\times {SC}_{it-1}$	−0.003*** (0.001)	−0.008** (0.004)	−0.010 (0.008)	−0.007* (0.004)	−0.014** (0.007)	−0.004** (0.002)	−0.010** (0.005)
${\mathit{INF}}_{it}$	−0.026 (0.011)	−0.045* (0.022)	−0.013 (0.019)	−0.060 (0.038)	−0.038** (0.019)	−0.013 (0.018)	−0.036 (0.033)
${\mathit{INS}}_{it}$	0.544*** (0.169)	0.625*** (0.183)	0.254* (0.156)	0.865** (0.265)	0.661*** (0.221)	0.254* (0.145)	0.523*** (0.197)
${CD}_i$	−0.028 (0.066)	−0.123** (0.060)	−0.178 (0.121)	−0.144* (0.081)	−0.144** (0.069)	−0.179** (0.067)	−0.164** (0.063)
${ER}_{it}$	−0.069** (0.031)	0.009 (0.016)	−0.006 (0.040)	−0.007 (0.009)	0.008 (0.017)	−0.006 (0.040)	−0.003 (0.016)
$\ln {\mathit{POP}}_{it}$	0.264*** (0.068)	0.490*** (0.057)	0.785*** (0.131)	0.639*** (0.065)	0.753*** (0.083)	0.311*** (0.066)	0.596*** (0.052)
$\ln {\mathit{GDP}}_{it}$	0.529*** (0.108)	0.326*** (0.111)	0.365*** (0.114)	0.695*** (0.168)	0.747*** (0.154)	0.188* (0.103)	0.577*** (0.118)
$\mathit{lnC}{\mathit{GDP}}_t$	0.229 (0.184)	0.101 (0.111)	0.042 (0.189)	0.035 (0.094)	0.055 (0.086)	0.042 (0.189)	0.076 (0.131)
$\ln {\mathit{DIS}}_i$	−0.448** (0.219)	−0.328* (0.158)	−0.593** (0.254)	−0.774*** (0.142)	−0.265* (0.156)	−0.593** (0.254)	0.756*** (0.122)
R^2	0.2586	0.6801	0.1350	0.6655	0.6535	0.3026	0.4106
Pseudo log-likelihood	−1786.29	−1276.36	−612.09	−675.99	−853.89	−946.71	−1161.53
Ramsey (p-value)	0.092	0.314	0.159	0.126	0.073	0.191	0.086
Observations	1551	1551	1551	1551	1551	1551	1551

Notes: 1. Robust standard errors are reported in parentheses; 2. *, **, *** denote significance at 10%, *** 5% and * 1% level, respectively; 3. Results are conducted with the use of the STATA 14.

Source: calculated by authors.

Table 6. PPML estimations for the effect of sister-city partnership according to different tiers of Chinese cities.

	Model 1	Model 2	Model 3	Model 4	Model 5
${\mathit{Super}}_{it-1}$	0.024** (0.011)
${\mathit{Tier}1}_{it-1}$		0.016** (0.008)
${\mathit{Tier}2}_{it-1}$			0.022** (0.009)
${\mathit{Tier}3}_{it-1}$				0.027*** (0.020)
${\mathit{Tier}4}_{it-1}$					0.059** (0.026)
${\mathit{BRI}}_{it-1}$	0.209*** (0.042)	0.272*** (0.066)	0.442*** (0.097)	0.276*** (0.074)	0.441*** (0.104)
${\mathit{BRI}}_{it-1}\times {\mathit{Super}}_{it-1}$	−0.017 (0.019)
${\mathit{BRI}}_{it-1}\times {\mathit{Tier}1}_{it-1}$		−0.014** (0.006)
${\mathit{BRI}}_{it-1}\times {\mathit{Tier}2}_{it-1}$			−0.016** (0.007)
${\mathit{BRI}}_{it-1}\times {\mathit{Tier}3}_{it-1}$				−0.005 (0.014)
${\mathit{BRI}}_{it-1}\times {\mathit{Tier}4}_{it-1}$					−0.017*** (0.005)
${\mathit{INF}}_{it}$	−0.010 (0.009)	−0.014 (0.011)	−0.024** (0.011)	−0.016** (0.008)	−0.023** (0.010)
${\mathit{INS}}_{it}$	0.157*** (0.053)	0.164** (0.069)	0.172** (0.64)	0.168** (0.064)	−0.169** (0.072)
${CD}_i$	−0.113 (0.136)	−0.114 (0.072)	−0.094 (0.080)	−0.118 (0.081)	−0.109 (0.078)
${ER}_{it}$	−0.072 (0.075)	−0.075* (0.040)	−0.077** (0.039)	−0.076* (0.039)	−0.075* (0.038)
$\ln {\mathit{POP}}_{it}$	0.610*** (0.085)	0.611*** (0.087)	0.524*** (0.084)	0.578*** (0.085)	0.571*** (0.081)
$\ln {\mathit{GDP}}_{it}$	0.941*** (0.124)	0.941*** (0.0.125)	0.885*** (0.123)	0.919*** (0.124)	0.856*** (0.122)
$\ln {\mathit{CGDP}}_t$	0.261 (0.195)	0.265 (0.197)	0.236 (0.183)	0.231 (0.179)	0.228 (0.182)
$\ln {\mathit{DIS}}_i$	−0.223 (0.172)	−0.212 (0.183)	−0.216 (0.151)	−0.208 (0.198)	−0.183 (0.183)
R^2	0.3406	0.2355	0.2849	0.2913	0.2720
Pseudo log-likelihood	−4307.67	−4709.32	−4639.93	−4171.57	−4670.67
Ramsey (p-value)	0.149	0.151	0.173	0.088	0.634
Observations	1551	1551	1551	1551	1551

Notes: 1. Dependent variable, volume of outward FDI; 2. Robust standard errors are reported in parentheses; 3. *, **, *** denote significance at 10%, *** 5% and * 1% level, respectively; 4. All tiers of cities are separately estimated due to high correlation; 5. Results are conducted with the use of the STATA 14.

Source: calculated by authors.