Assessing the effectiveness of China’s investment strategy in Central and Eastern Europe under the Belt and Road initiative
DOI:
https://doi.org/10.26661/2522-1566/2026-3/37-07Keywords:
China, Belt and Road Initiative, outward foreign direct investment, Central and Eastern Europe, economic growth, gross fixed capital formation, manufacturing, panel data.Abstract
The purpose of this article is to assess the relationship between Chinese investment and key macroeconomic outcomes in Central and Eastern European countries within the framework of the Belt and Road Initiative. The study examines whether higher levels of Chinese investment are associated with changes in GDP growth, gross fixed capital formation, and manufacturing value added.
Design/methodology/approach. The empirical analysis is based on panel data for 12 Central and Eastern European countries over the period 2013–2024, comprising 144 country-year observations. Chinese investment data are obtained from the China Global Investment Tracker, while macroeconomic indicators are primarily sourced from the World Development Indicators. Two-way fixed-effects panel regression models with country and year effects are estimated. Inflation and trade openness are included as control variables. Chinese investment is introduced with a one-year lag, while robustness checks employ a logarithmic transformation and a two-year lag. Standard errors are clustered at the country level.
Findings. The results do not reveal a statistically significant average relationship between Chinese investment and GDP growth, gross fixed capital formation, or manufacturing value added. This finding remains robust across the baseline and alternative model specifications.
Research limitations/implications. The analysis is based on aggregate macroeconomic indicators and a relatively small regional sample, while the China Global Investment Tracker primarily captures large investment transactions. The estimated coefficients should therefore be interpreted as statistical associations rather than causal effects.
Originality/value. The study provides region-specific evidence on the relationship between Chinese investment and three dimensions of macroeconomic performance in Central and Eastern Europe using a consistent panel-data framework.
JEL Classification: F21, F43, O52, C23.
References
1. American Enterprise Institute. (n.d.). China Global Investment Tracker. Retrieved September 12, 2026, https://www.aei.org/china-global-investment-tracker/
2. Bieliński, T., Markiewicz, M., & Oziewicz, E. (2019). Do Central and Eastern Europe countries play a role in the Belt and Road Initiative? The case of Chinese OFDI into the CEE–16 countries. Comparative Economic Research. Central and Eastern Europe, 22(2), 7–22. https://doi.org/10.2478/cer-2019-0009
3. Cameron, A. C., & Miller, D. L. (2015). A practitioner’s guide to cluster-robust inference. Journal of Human Resources, 50(2), 317–372. https://doi.org/10.3368/jhr.50.2.317
4. Fu, X., Buckley, P. J., & Fu, X. M. (2020). The growth impact of Chinese direct investment on host developing countries. International Business Review, 29(2), 101658. https://doi.org/10.1016/j.ibusrev.2019.101658
5. International Monetary Fund. (n.d.). World Economic Outlook Database. Retrieved September 12, 2026, from https://www.imf.org/en/Publications/WEO/weo-database
6. Liu, H., Wang, C., Zhang, Q., & Wang, Y. (2024). The impact of Chinese overseas industrial parks on the productive capability of BRI host countries. China Economic Review, 85, 102183. https://doi.org/10.1016/j.chieco.2024.102183
7. Rogach, O., & Chugaiev, O. (2023). Structural trends in China’s outward investment-related activities. OBOR Working Papers, 1, 52–63. https://doi.org/10.63596/oborjournal.1.2023.52-63
8. Rogach, O., & Chugaiev, O. (2024). Chinese outward investments and its bilateral imports: partners’ benefits under Belt and Road Initiative. Hong Kong Review of Belt and Road Studies, 1(3), 6–25. https://doi.org/10.63596/oborjournal.1.2024.6-25
9. United Nations Economic Commission for Europe. (n.d.). Manufacturing value added as a proportion of GDP. Retrieved September 12, 2026, from https://w3.unece.org/SDG/en/Indicator?id=129
10. World Bank. (2019). Belt and Road Economics: Opportunities and Risks of Transport Corridors. World Bank. https://doi.org/10.1596/978-1-4648-1392-4
11. World Bank. (n.d.). World Development Indicators. Retrieved September 12, 2026, from https://databank.worldbank.org/source/world-development-indicators
12. Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data (2nd ed.). The MIT Press.
13. Wu, H., Ren, S., Yan, G., & Hao, Y. (2020). Does China’s outward direct investment improve green total factor productivity in the “Belt and Road” countries? Evidence from dynamic threshold panel model analysis. Journal of Environmental Management, 275, 111295. https://doi.org/10.1016/j.jenvman.2020.111295
14. Yeung, H., & Huber, J. (2024). Has China’s Belt and Road Initiative positively impacted the economic complexity of host countries? Empirical evidence. Structural Change and Economic Dynamics, 69, 246–258. https://doi.org/10.1016/j.strueco.2023.12.012
15. Yu, S., Qian, X., & Liu, T. (2019). Belt and Road Initiative and Chinese firms’ outward foreign direct investment. Emerging Markets Review, 41, 100629. https://doi.org/10.1016/j.ememar.2019.100629
REFERENCES
American Enterprise Institute. (n.d.). China Global Investment Tracker. Retrieved September 12, 2026, from https://www.aei.org/china-global-investment-tracker/
Bieliński, T., Markiewicz, M., & Oziewicz, E. (2019). Do Central and Eastern Europe countries play a role in the Belt and Road Initiative? The case of Chinese OFDI into the CEE–16 countries. Comparative Economic Research. Central and Eastern Europe, 22(2), 7–22. https://doi.org/10.2478/cer-2019-0009
Cameron, A. C., & Miller, D. L. (2015). A practitioner’s guide to cluster-robust inference. Journal of Human Resources, 50(2), 317–372. https://doi.org/10.3368/jhr.50.2.317
Fu, X., Buckley, P. J., & Fu, X. M. (2020). The growth impact of Chinese direct investment on host developing countries. International Business Review, 29(2), 101658. https://doi.org/10.1016/j.ibusrev.2019.101658
International Monetary Fund. (n.d.). World Economic Outlook Database. Retrieved September 12, 2026, from https://www.imf.org/en/Publications/WEO/weo-database
Liu, H., Wang, C., Zhang, Q., & Wang, Y. (2024). The impact of Chinese overseas industrial parks on the productive capability of BRI host countries. China Economic Review, 85, 102183. https://doi.org/10.1016/j.chieco.2024.102183
Rogach, O., & Chugaiev, O. (2023). Structural trends in China’s outward investment-related activities. OBOR Working Papers, 1, 52–63. https://doi.org/10.63596/oborjournal.1.2023.52-63
Rogach, O., & Chugaiev, O. (2024). Chinese outward investments and its bilateral imports: partners’ benefits under Belt and Road Initiative. Hong Kong Review of Belt and Road Studies, 1(3), 6–25. https://doi.org/10.63596/oborjournal.1.2024.6-25
United Nations Economic Commission for Europe. (n.d.). Manufacturing value added as a proportion of GDP. Retrieved September 12, 2026, from https://w3.unece.org/SDG/en/Indicator?id=129
World Bank. (2019). Belt and Road Economics: Opportunities and Risks of Transport Corridors. World Bank. https://doi.org/10.1596/978-1-4648-1392-4
World Bank. (n.d.). World Development Indicators. Retrieved September 12, 2026, from https://databank.worldbank.org/source/world-development-indicators
Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data (2nd ed.). The MIT Press.
Wu, H., Ren, S., Yan, G., & Hao, Y. (2020). Does China’s outward direct investment improve green total factor productivity in the “Belt and Road” countries? Evidence from dynamic threshold panel model analysis. Journal of Environmental Management, 275, 111295. https://doi.org/10.1016/j.jenvman.2020.111295
Yeung, H., & Huber, J. (2024). Has China’s Belt and Road Initiative positively impacted the economic complexity of host countries? Empirical evidence. Structural Change and Economic Dynamics, 69, 246–258. https://doi.org/10.1016/j.strueco.2023.12.012
Yu, S., Qian, X., & Liu, T. (2019). Belt and Road Initiative and Chinese firms’ outward foreign direct investment. Emerging Markets Review, 41, 100629. https://doi.org/10.1016/j.ememar.2019.100629
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