Can friend-shoring policies improve export resilience? A study based on the Belt and Road initiative

Abstract

This paper investigates the role of the Belt and Road Initiative (BRI) in enhancing the export resilience of countries along its route. It calculates the export resilience for 145 products in 130 countries from 1990 to 2018, using the Economic Vulnerability Index released by the Committee for Development Policy of the United Nations. Employing a Difference-in-Differences analysis, the BRI’ impact on the export resilience of each product by country is examined. The findings reveal a significant positive effect of the BRI on the export resilience of countries along its route, indicating an improvement in their export performance and risk resistance. It has been proven that regional economic integration promotes the security and stability of industrial chains. This conclusion helps countries effectively respond to the rising risks of external shocks in the rapidly changing global economic landscape and expands current academic exploration on resilience. The results also show that the BRI's impact has a three-year lag, consistent with its gradual implementation characteristics and demonstrating its effectiveness. The heterogeneity analysis reveals a greater impact on low-income countries, highlighting the need for those countries to enhance regional economic cooperation. This paper also points out the necessity for China's less developed border regions to increase openness and strengthen international connections.