Research On The Impact Of The Online Silk Road On The Regional Economy

When Chinese President Xi Jinping visited Central Asia and Southeast Asia in September and October of 2013,he raised the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road(the Belt and Road initiative).“Online Silk Road”,as the Internet in the Belt and Road region,will be five roads: a road of unblocked information flow,a road of technology cooperation,a road of capital flows,a road of cultural and people exchanges,and a road to economic and trade prosperity.Accelerating the building of "Online Silk Road" can help promote the economic growth of the countries along the Belt and Road region.The construction of "Online Silk Road" is an important part of the Belt and Road initiative.However,the "Online Silk Road" is not well developed in many countries in the region.One factor is that many countries have not realized its importance.Therefore,this paper aimed to the research on the effect of "Online Silk Road" on economic in the Belt and Road region.The Internet has various economic functions and is a fundamental part of most economic activities and transactions.In this paper we apply a Dynamic Panel Data approach to study the impact of the Internet on GDP using data from 65 the Belt and Road countries for the period 1996~2014.The results of the study show that the Internet has positive and statistically significant effects on economic growth.Assuming other factors stay constant,increasing the number of Internet users by 10 percent increases GDP by 0.8%.This effect increases together with the development of Internet.However,the effect is quite different for each country.To find the factors behind,the paper find that capital,labor force,technology,industry structure,international trade and economic level are essential to explain the difference of the Belt and Road countries.Furthermore,these countries can be divided into 3 types by economic level and the development mode.In the paper,we also analyzed the Industrial effect of Internet by using Input-Output data during 2000 and 2014 of 16 countries in the Belt and Road region.The Internet industry has become a main industry of the countries;it grew from 3.7% of the Gross National Product in 2000 to 4.5% in 2014,and contributes 4.6% of GDP growth.One unit production of the Internet industry could lead to 1.25~2.39 unit production of other industries,and one unit production of the other industries need 1.25~2.3 unit production of the Internet industry.The relation between the Internet industry and the domestic industries are more effective in most countries,however,the “Manufacture of computer,electronic and optical products” sector in China is quite different with closer relation between foreign countries.Finally,suggestions are given to all countries to construct the “Online Silk Road” in their own country,and China should promote the construction in the whole region.