Belt and road initiative-induced transport infrastructure and export sophistication: evidence from a multi-regional panel analysis

Abstract

Purpose The study is conducted to investigate the impact of Belt and Road Initiative (BRI)-induced transport infrastructure on export sophistication in BRI member countries. For this purpose, panel data from 65 BRI member countries from 1990 to 2023 are utilized both in the total sample and in the grouped sample of South Asia, Southeast Asia, Central Asia, the Middle East & Africa and European BRI member countries. Design/methodology/approach We have devised a new global transport infrastructure to cover all the key extents (i.e. air, sea and land infrastructure). For analysis, a panel ARDL model with a dummy approach is employed. Findings The result of the study shows that BRI-induced transport infrastructure has a positive significant impact on export sophistication in every sample of the study. By comparing the results of different samples of the study, we conclude that BRI-induced transport infrastructure impact on export sophistication is stronger in the Central Asian sample, followed by the total sample and the Southeast Asian sample, while in the case of South Asia, the Middle East, Africa and the European sample, its effects are relatively low. The study further points out that with the passage of time, transport infrastructure’s impact on export sophistication increases. Besides the main variables, the control variables of the study, such as institutional quality, human capital (taken as a proxy for knowledge), FDI, per capita GDP and research & development expenditures (taken as a proxy for innovation), have a positive impact on export-sophistication, while exchange rates have a negative impact on export-sophistication. Originality/value For the robustness check of these results, the GMM estimation procedure is adopted, which confirms the reliability of the estimated panel Autoregressive Distributed Lag results of our study.