Logistics as a driving force for development under the Belt and Road Initiative - the Chinese model for developing countries

Abstract

An important objective of the Belt and Road Initiative is to promote the economic growth of countries in the region. China's successful development experience, proposed in the initial stage of reform, can be summarised as Looking for development, building the highway first. This study is the first to evaluate whether logistics infrastructure has indeed contributed to economic growth by employing an error correction model with panel data from 2003 to 2014. In addition, we compare the influence levels of different sectors of logistics infrastructure in different regions, i.e. developed and developing regions. We focus on developing regions as they represent good development experiences for developing countries in the Silk Road Economic Belt. For developing regions, we find that the most influential factors are telecommunication and airway transportation, which should be the foci of attention in order to promote economic growth and reduce inter-region economic inequalities. The research confirms that logistics is indeed a driving force for economic growth in China, and that the contributions of specific sectors can be a useful reference for developing countries to determine prioritisation of investment in different logistics sectors across regions.