The digital silk road and trade growth – A quasi-natural experiment based on silk road E-commerce

Abstract

The construction of the Digital Silk Road is an important component of the Belt and Road initiative. Based on data sourced from 190 countries between 2012 and 2019, this study examines the impact of building the Digital Silk Road on the development of foreign trade among countries along the route. The analysis employs a PSM-DID model that utilizes a quasi-natural experimental environment provided by the Silk Road e-commerce cooperation initiative. The study presents the following findings. First, the Digital Silk Road initiative helps promote the development of foreign trade among countries along the route. Second, the impact of this initiative on the development of foreign trade is primarily influenced by the levels of human capital and innovation. Third, the effect of this initiative on trade is more significant when the trading partner country has a high level of economic development, a high level of digital infrastructure development, or is not a neighboring country.