The institutional improvement effects of China’s foreign infrastructure investment and its mechanisms: implications for the construction of the belt and road initiative

Reducing the high incidence of corruption in the field of infrastructure investment is a significant research topic. China is committed to advancing the Belt and Road Initiative (BRI) as a path of integrity. This paper aims to analyze the effects and mechanisms of institutional improvement induced by China's foreign infrastructure investments. The study employs project data and survey questionnaire data from project locations. We find that China's foreign infrastructure investments can endogenously drive the improvement of property rights systems in the surrounding areas of the projects, with the institutional improvement effects mainly occurring during the project initiation and completion phases, and these effects are long-lasting. Heterogeneity analysis shows that commercialized projects are the core driving force behind the improvement of property rights systems through China's foreign infrastructure investments. Based on this, the paper proposes two suggestions for promoting the construction of the BRI as a path of integrity.