The Influence of Institutional Differences on the Foreign Trade Relations between China and the Countries along the Belt and Road —Based on Stochastic Frontier Gravity Model

doi:10.16716/j.cnki.65-1030/f.2021.03.007

Abstract

Abstract: The Belt and Road Initiative plays a strategic role in the foreign trade of China and the countries along the routes, and is an important measure for China to further expand its opening to the outside world. This paper selects trade data of 56 countries along the Belt and Road from 2000 to 2018, using the expansion of the gravity of stochastic frontier model from two aspects: import and export trade to analyze the influence of of institutional differences on trade relations to China and countries along the Belt and Road. The results show that there is an inverted U-shaped relationship between the total index of institutional differences and China's import and export trade. It shows that the institutional differences within the rationalization scope have a promoting effect on the export trade, and more than the rationalization level will restrain the growth of the export trade and the expansion of the import trade market. In addition, by constructing the sub-index model of institutional differences and comparing it with the total index of institutional difference, it is concluded that the total index of institutional difference and the sub-index of institutional difference have significant differences in the impact on the volume of import and export trade. Therefore, it is suggested to improve the import trade system standard, enhance the external publicity, and ensure the stability of the economic environment.

Key words: Silk Road Economy, the Belt and Road Initiative, Countries along the Belt and Road, Institutional Differences, Import and Export Trade, Bilateral Trade, the Gravity Model

CLC Number:

F752.7

Niu Jun, Lu Yuze. The Influence of Institutional Differences on the Foreign Trade Relations between China and the Countries along the Belt and Road —Based on Stochastic Frontier Gravity Model[J]. Finance & Economics of Xinjiang, 2021, (3): 71-80.

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