How do the foreign investment, migration and global value chains (GVC’s) affect the trade liberalization in Belt and Road Initiative countries.

Abstract

The belt and road initiative is a fantastic opportunity for international trade of these by increasing their share in global trade. This study investigates the effects of foreign investment, global value chains, financial development, and migration on international trade liberalization from 1998 to 2020. The data of this study is based on belt and road initiative countries by analyzing with panel regression, Hausman test, ordinary least square, and yearly fixed models to evaluate the nexus between the variables. Moreover, Generalize Method of Movement (GMM) is performed to check the endogeneity issues in panel data. The study's findings suggested that foreign direct investment and migration enhance trade openness. At the same time, trade liberalization is associated with fewer global value chain integrations. The evidence in this study supports that political stability, domestic financial development, and gross domestic product are important factors of trade openness. This study suggests policy proposals for improving trade openness and foreign direct investment. Because of international trade, it is advised to reduce global trade barriers.