Trade and Infrastructure in the Belt and Road Initiative: A Gravity Analysis Based on Revealed Trade Preferences

This paper aims at investigating whether and how the intensity of trade between a pair countries changes when they experience improvements in their infrastructural systems. We carry out our analysis considering participating Belt Road Initiative (BRI), project specifically designed to promote connectivity therefore boost among involved. Our empirical strategy relies on particular specification gravity model, which dependent variable consists an index revealed preferences, calculated by comparing actual value flows two with expected value, proportional countries’ total trade. Such methodology allows us estimate bilateral without resorting traditional “size” variables taking entire network multilateral into account. then study possible impact improvement infrastructure ‘gravity-adjusted’ measure given residuals first estimations. results indicate that preferences BRI will intensify inasmuch as succeed coordinating projects.