The belt and road initiative and green productions: Evidence from Chinese overseas industrial parks

Abstract

In this paper, we examine the positive effects of the establishment of Chinese Overseas Industrial Parks in Belt and Road member countries on green production. Using a rigorous difference-in-differences (DID) econometric approach, we measure Green Total Factor Productivity (GTFP) growth in host countries before and after the establishment of the industrial parks, with GTFP calculated using the SBM-DDF-GML algorithm. Our estimations show that the establishment of industrial parks increases GTFP by approximately 20% on average across all member countries. Placebo tests and other robustness checks further support these results. We also find that the industrial parks yield greater benefits for host countries that had relatively low levels of Chinese FDI before 2007, as well as those with limited renewable energy technologies and poor infrastructure.