Quantifying the Economic Effects of the Belt and Road Initiative: A Global Value Chain Approach

Quantifying the Economic Effects of the Belt and Road Initiative: A Global Value Chain Approach | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Quantifying the Economic Effects of the Belt and Road Initiative: A Global Value Chain Approach Siyi Peng, Daocheng Zhong This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-3633380/v1 This work is licensed under a CC BY 4.0 License Status: Under Revision Version 1 posted 5 You are reading this latest preprint version Abstract Limited literature studies the economic effects of the Belt and Road Initiative considering the rising trend of fragmented production. By distinguishing between intermediates and final goods in a general equilibrium model and estimating asymmetric trade costs, we quantify the economic impacts of the initiative. We find that the Belt and Road Initiative has welfare gains worldwide especially for Malaysia and Vietnam. China, the initiative's proponent, has moderate welfare gains. Some non-members experience slight welfare loss, such as 0.008% for Germany. The initiative's trade effects are more pronounced in final goods than intermediates. To figure out the direction of value-added, we distinguish the perspective of forward- (as a supply-side for sales) and backward-linkages (as a demand-side for use). Furthermore, members of the initiative participate more in GVCs at both forward- and backward-linkage. The change in the GVC position index reveals that the initiative reshapes members' positions in production chains. Both forward- and backward-linkage production lengths within members become longer, implying more complex chains and tighter linkages between members. Counterfactuals show that if Germany were to join the initiative, it would yield improved economic effects for itself and its members. Additionally, we employ more counterfactuals to demonstrate the role of asymmetric trade costs, input-output linkages, and industry heterogeneity. Through quantification of the initiative, we aim to provide insights for policymakers from the perspective of global value chains. JEL Classification： D5, F10, F11, F13, F14, F17 The Belt and Road initiative Welfare Global value chains Quantitative trade models Full Text Cite Share Download PDF Status: Under Revision Version 1 posted Editorial decision: Revisions needed 24 Jul, 2024 Reviewers agreed at journal 02 May, 2024 Reviewers invited by journal 02 May, 2024 Editor assigned by journal 21 Nov, 2023 First submitted to journal 19 Nov, 2023 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-3633380","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":297869795,"identity":"6cff8639-3bc5-4a26-85cd-531b7980152a","order_by":0,"name":"Siyi Peng","email":"","orcid":"","institution":"Hunan University School of Economics and Trade","correspondingAuthor":false,"prefix":"","firstName":"Siyi","middleName":"","lastName":"Peng","suffix":""},{"id":297869796,"identity":"82bf7973-dc5e-4fa4-9155-584ff6cff362","order_by":1,"name":"Daocheng Zhong","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA80lEQVRIiWNgGAWjYDACCRDBBmUwNjAw8DMzH35AmhbJdrY0A9K0GJznUZDAp0N+dvOxh1/K7OT4QYyvO+4kbj7Mw2DAUGMTjUsL45xj6cYy55KNJe4AGbJnniVuO8x74AHDsbTcBhxamCVyzKQl25gTN0AYh4Fa+BIMGBsO49TCBlFZD9SS/w2sZXMzj4EEPi08QC2SH4EqgbawQRjMBLRISKSlSTOcO24scSPNTJqx7bDxjMPAQE7A4xf5GcnHJH+UVcvxz0h+Jvmz7bBsf//hww8+1Njg1AIOAh50BkMCHuUgwPgDnTEKRsEoGAWjABkAAIgEWlkubsYzAAAAAElFTkSuQmCC","orcid":"https://orcid.org/0009-0000-5790-3786","institution":"Renmin University of China School of Applied Economics","correspondingAuthor":true,"prefix":"","firstName":"Daocheng","middleName":"","lastName":"Zhong","suffix":""}],"badges":[],"createdAt":"2023-11-19 07:13:04","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-3633380/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-3633380/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":56068322,"identity":"86f34d8b-b6e3-408f-a2a0-0d43543779f7","added_by":"auto","created_at":"2024-05-08 06:46:48","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":875863,"visible":true,"origin":"","legend":"","description":"","filename":"ManuscriptQuantifyingtheEconomicEffectsoftheBRI.pdf","url":"https://assets-eu.researchsquare.com/files/rs-3633380/v1_covered_1a86cca7-79da-47ad-82d1-2d7a22c62ded.pdf"}],"financialInterests":"","formattedTitle":"Quantifying the Economic Effects of the Belt and Road Initiative: A Global Value Chain Approach","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"review-of-world-economics","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"rowe","sideBox":"Learn more about [Review of World Economics](http://link.springer.com/journal/10290)","snPcode":"10290","submissionUrl":"https://www.editorialmanager.com/rowe/default2.aspx","title":"Review of World Economics","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"em","reportingPortfolio":"Springer Hybrid","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"The Belt and Road initiative, Welfare, Global value chains, Quantitative trade models","lastPublishedDoi":"10.21203/rs.3.rs-3633380/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-3633380/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eLimited literature studies the economic effects of the Belt and Road Initiative considering the rising trend of fragmented production. 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