TITLE:
A Study of Trade Efficiency and Potentials between Jiangsu Province and the Countries along the Belt and Road Initiative
AUTHORS:
Jiayu Wang, Wen Tian
KEYWORDS:
Trade Potential, Trade Efficiency, Stochastic Frontier Gravity Model, The Belt And Road Initiative
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.8 No.2,
February
26,
2020
ABSTRACT: This
paper applies Stochastic Frontier Analysis (SFA) to a broad data set for
selected 48 countries along the Belt and Road from 2002 to 2017, and analyzes
foreign trade potential and trade efficiency between Jiangsu Province and
countries along the Belt and Road. The empirical analysis shows that trade
efficiency of Jiangsu Province has been improved gradually year by year in
general. From the view of natural factors, the research identifies market size,
establishment of diplomatic relation and the bilateral geographical distance
between Jiangsu Province and countries can stimulate Jiangsu Province’s foreign
trade respectively. From the perspective of human factors, one-step model
discovers that government efficiency, political stability and investment freedom are
crucial to improving trade efficiency. However, financial freedom and the
current situation of transportation infrastructures will aggregate
inefficiencies to some extent. Based on these findings, the paper proposes how
to expand foreign trade and improve trade efficiency between Jiangsu Province
relative to countries the Belt and Road Initiative.