How Do Overseas Economic and Trade Cooperation Zones along the Belt and Road Affect the Economic Growth of Host Countries?

Abstract

Based on the data of countries along the “One Belt and One Road” from 1998 to 2017, this paper uses the progressive Difference-in-Difference to analyze the impact of overseas economic and trade cooperation zones on the economic growth of host countries, which shows that the establishment of overseas economic and trade cooperation zones significantly promotes the economic development of host countries. Additionally, the specific mechanism of overseas economic and trade cooperation zones to promote the economic growth of the host country is analyzed using the mediating effect model, and the study shows that the overseas economic and trade cooperation zones can encourage the economic development of the host countries by attracting foreign investment inflows. Further heterogeneity analysis reveals that overseas economic and trade cooperation zones have stronger economic boosting effects on countries with lower income levels and poorer business systems. Different types of overseas economic and trade cooperation zones have other economic boosting effects on host countries. Among them, the economic impact of industrial, agricultural, and high-tech zones is significant, while the influence of logistics and comprehensive industrial zones is not yet significant. Finally, the paper carries out further discussion based on the above findings.