Does the Belt and Road Initiative Promote the Cross-Border Capital Flows for the Participating Economies?
Existing literature mostly focuses on the impact of the Belt and Road Initiative(BRI)on China or the eco-nomic relations between and among the participating economies and China.However,this paper investigates whether the BRI can enhance the connectivity between the participating economies and the rest of the world,as well as whether it can deepen the cooperation mechanisms among economies,thus practicing a new concept of shared and reciprocal development.Based on the panel data covering 59 economies from 2000Q1 to 2020Q3,the paper employs a DID method to investigate the impact of the BRI on cross-border capital flows of the participating economies from two dimensions:financial account sub-items(direct investment,portfolio,other investment)and flow directions(inflows and outflows).The findings of this study are as follows.Firstly,after the implementation of the BRI,cross-border capital inflows and out-flows from the participating economies to the world have significantly increased compared to other economies.Secondly,regard-ing financial account sub-items,the inflows of direct investment and portfolio investment of the participating economies have grown more significantly compared to other economies,indicating that economies around the world are more willing to engage in direct investment and purchase stocks and bonds in these economies.Thirdly,the outflows of direct investment,portfolio in-vestment,and other investment from the participating economies have shown a larger scale compared to other economies after the implementation of the BRI,implying that these economies are more actively"going abroad"and integrating into the global economy comprehensively.Mechanism tests reveal that the BRI promotes the growth of cross-border capital inflows and outflows of the participating economies through mechanisms such as policy,infrastructure,trade,financial and people-to-people connectivity.This article enriches the research on the economic effects of the BRI,provides new perspectives and empirical evidence to confirm the BRI's role in promoting regional prosperity and development,and offers policy insights for high-quality BRI con-struction.
the Belt and Road InitiativeCross-Border Capital FlowsFinancial Account Sub-ItemsShared and Re-ciprocal
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