Does the Belt and Road Initiative affect the business environment of participating countries?

Abstract

This article analyzes the impact of the Belt and Road Initiative (BRI) on the economic and business environment of its participants using the Global Doing Business Report from the World Bank. We use a difference-in-difference approach to identify the impact by considering BRI as an exogenous policy shock. We find that BRI positively impacts the business environment of the participating countries; in particular, there is a great improvement in the scores of business starting and contract enforcing. The positive effect is larger in low-income countries and the countries with a growing investment from China.

Keywords:

• Belt and Road Initiative
• business environment
• trade and investment
• propensity score matching
• difference-in-difference

JEL CLASSIFICATIONS::

• E65
• F42
• M21

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Data Source: http://www.doingbusiness.org/rankings

2 Data Source: https://www.worldbank.org/en/topic/regional-integration/brief/belt-and-road-initiative

3 Please see Section 4.6 for details.

4 We also conducted empirical tests on each income group separately, and the results were consistent with the above results.

5 For the data of Weighted DB in year 2018, we use the weighting method to get, namely Weighted DoBus2018 = 2/3*DoBusReport2020 + 1/3*DoBusReport2019.

Additional information

Funding

This research was supported by the National Social Science Fund of China, Major Program (Grant No.08&ZD037).