Abstract
This paper studies the impact of transport infrastructure projects of the Belt and Road Initiative on shipment times and trade costs. Based on a new data on completed and planned Belt and Road transport projects, Geographic Information System analysis is used to estimate shipment times before and after the Belt and Road Initiative. Two sets of data are computed to address different research questions: a global database based on an analysis of 1,000 cities in 191 countries and 47 sectors and a regional database that focuses on more granular information (1,818 cities) for Belt and Road economies only. The paper uses sectoral estimates of “value of time” to transform changes in shipment times into changes in ad valorem trade costs at the country‐sector level. The findings show that the Belt and Road Initiative will significantly reduce shipment times and trade costs. For the world, the average reduction in shipment time will range between 1.2 and 2.5 percent, leading to reduction of aggregate trade costs between 1.1 and 2.2 percent. For Belt and Road economies, the change in shipment times and trade costs will range between 1.7 and 3.2 percent and 1.5 and 2.8 percent, respectively. Belt and Road economies located along the corridors where projects are built experience the largest gains. Shipment times along these corridors decline by up to 11.9 percent and trade costs by up to 10.2 percent.
Highlights
The Belt and Road Initiative (BRI) is a development strategy proposed by China that focuses on connectivity and cooperation on a trans‐continental scale
We focus on the consequences of transport infrastructures linked with the Belt and Road Initiative and quantify the associated decrease in shipment times and trade costs
We present the key results of the impact of BRI related transport projects on trade costs based on the global database
Summary
The Belt and Road Initiative (BRI) is a development strategy proposed by China that focuses on connectivity and cooperation on a trans‐continental scale. It roughly follows and expands the old Silk Road on the land side and complements it with a maritime part to build a series of economic corridors with the goal of boosting trade and stimulating economic growth across Asia, Europe and Eastern Africa.[2] The range of initiatives and activities that will be part of the BRI is very wide, including policy coordination, infrastructure, trade and investment, financial and people‐to‐people exchanges. The focus on fewer countries allows to include in the analysis a larger number of cities
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