Global Value Chain Optimization Effectof the Belt and Road Initiative- From the Perspective of ImprovingParticipating Countries’ Position in the Divisionof Labor

Abstract

To promote the reconstruction and optimization of the global value chains(GVCs), it is essential to tackle the prominent contradictions and problems includinginequality of opportunity and status in the evolution of the GVC division of labor. The Beltand Road Initiative (BRI) promoted by China has obtained remarkable achievements in thisregard; however, there lacks sound theoretical and empirical evidence as to whether the BRIhas driven the GVCs to develop towards a more equitable direction. This paper employs thedifference-in-differences model to empirically analyze the GVC optimization effect of theBRI. In addition, on the basis of the so-called “five-pronged approach” index, the paperuses the mediating effect model to test the mechanism of influence. The empirical resultssuggest that the BRI has helped participating countries along the routes to increase theirposition in GVC division of labor significantly through the mediating mechanism of four outof the “ five-pronged approach”, namely policy coordination, road connectivity, unimpededtrade, and currency convertibility. The strengthening of and closer people-to-people tieshas not yet appeared to be an effective mediator, and a possible explanation may be that itsinfluence is indirect and lagging.