Research on the Impact of the “The Belt and Road” on the Development of Open Economy in the Central and Western Regions ——Empirical Analysis Based on Differences-in-Differences

Abstract

“The Belt and Road” (B&R) has made the mid-west region the frontier of opening to the outside. Based on the sample data from 51 cities from 2005 to 2019, the paper studies the policy effects of B&R on the open economy in the mid-west region by utilizing a difference-in-differences model. Also, building upon the index of level of infrastructure development, the paper analyzes the specific mechanism of this policy effect. The research results show that: B&R has elevated the level of opening-up in the mid-west region, as reflected in a significant increase in the regions’ foreign trade dependence and foreign investment reliance since the initiative was launched; further research reveals that B&R has a greater stimulating impact on promoting foreign trade in the mid-west region compared to attracting foreign investment while factors such as location and business environment have affected the policy effect of B&R to some extent. In terms of its mechanism of action, B&R has improved the transport facilitation and communication facilitation in the mid-west region, thereby promoting the development of its open economy. The research holds valuable insights for guiding China in the acceleration of the western region development through B&R, and the achievement of the high-quality opening economy development in the mid-west region.