The potential impact of Asian Infrastructure Investment Bank on economic growth in Asian developing countries: opportunities and challenges

摘要

The newly-established Asian Infrastructure Investment Bank (AIIB) has aroused public attention and comments in the whole 2014. However, researchers and economists have never reached the consensus on the economic impact of AIIB on Asian developing countries. The thesis aims to find out the potential role of AIIB in promoting economic growth in Asian developing countries through empirical research and its potential limitations and challenges that might occur in its later development path. The thesis emphasizes on the five countries with highest demand for aid which nearly account for 90% of the whole demand in Asia in infrastructure and observes the long run relationship between infrastructure development, official development aid (ODA) and economic growth through historical data of the macroeconomics variables in five countries in past two decades. In the research, autoregressive distributed lagged (ARDL) approach to cointegration is applied to help find out the long run coefficients between interested variables. Also, Granger causality test is employed to determine the causality between infrastructure development and economic growth. The empirical results imply that AIIB has a potentially positive role in promoting economic growth in Asian developing countries because at least one interested variable, namely, infrastructure development or ODA, has significant long-run relationship with economic growth in five countries. Based on the findings, suggestions have made to aid allocation criteria of AIIB, though it has not been announced yet using Performance-Based Assessment (PBA). At the same time, the thesis concludes the potential challenges facing AIIB in the last part of the thesis and personal views of possible solutions are pointed out accordingly.