Does the Belt and Road Initiative Affect the Trade in Virtual Water Imports of Grain? Evidence from China
2025
Junying Wang | Hao Ji | Lan Yao | Muhammad Naeem | Irfan Saleem
Based on trade data from 2005 to 2020, this study investigates the driving forces behind China&rsquo:s grain virtual water (VW) import trade, with a particular focus on the role of the Belt and Road Initiative (BRI). By incorporating economic distance (ED) and institutional distance (ID) into the gravity model framework and applying a high-dimensional fixed-effects Poisson pseudo-maximum likelihood estimation method, the study offers new empirical insights. The results indicate that ED is negatively associated with virtual water trade (VWT) in grains, while ID exhibits an inverted U-shaped relationship with VWT. Furthermore, the BRI significantly moderates the effects of ED and ID, weakening their influence on VWT. Additionally, the initiative demonstrates a clear trade creation effect, promoting increased VW imports. These findings contribute to a deeper understanding of the mechanisms shaping VWT and offer valuable policy guidance for enhancing international cooperation under the BRI framework.
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