The impact of Qilu strategy on boosting economic growth in China’s Belt and Road Initiative: an empirical study

This study examines the impact of the Qilu freight train on firm-level productivity within the context of China’s Belt and Road Initiative. While prior research has highlighted the role of infrastructure in facilitating trade and regional development, limited evidence exists on how such projects influence micro-level productivity and whether effects differ across firm types. To address this gap, this paper investigates whether and how the Qilu train enhances firm productivity, through which mechanisms, and under what conditions. Using panel data of Chinese listed firms from 2013 to 2019 and employing a difference-in-differences approach, the study first establishes the baseline impact of Qilu connectivity on total factor productivity. Mechanism analysis then identifies cost reduction and innovation as the main transmission channels, while heterogeneity tests assess differences across firm ownership, innovation intensity, cost structures, regions, and industrial linkages. The results reveal that the Qilu train significantly improves firm productivity, with more potent effects observed in inland firms, private enterprises, high-cost producers, and firms integrated into Northeast Asian industrial chains. Notably, both cost savings and innovation incentives contribute, though their relative importance varies across firm characteristics. These findings demonstrate the productivity-enhancing role of international freight rail and highlight its contribution to reducing regional and institutional disparities. The study provides new empirical evidence on the microeconomic benefits of the Belt and Road Initiative, offering insights for policymakers on how infrastructure projects can foster inclusive and innovation-driven growth.