Empirical Research on Connectedness for International Trade and Investment between Guangzhou and Countries along B&R Based on PVAR Test

Abstract

Guangzhou, an international trading hub, plays an important role in the development of Belt and Road Initiative (B&R Initiative). We select the Export Similarity Index and Trade Intensity Index (ESI and TII) for trade and investment, and analyse the interconnectedness between trade and investment in the aspect of capacity cooperation between Guangzhou and countries along B&R, basing on the PVAR model. The result shows that the increase of investment and trade of Guangzhou has remarkably positive influence on the future ones of the countries along the B&R. We suggest that Guangzhou insist on attracting foreign investment and opening to the outside world, and consider carefully about the complementary relationship between trade and investment for capacity when establishing the related policy.