China's Location Choice for OFDI in the Countries Along the Belt and Road:From the perspective of Factor Environment Competitiveness
Abstract
In order to test whether China chooses foreign investment projects based on the"factor" conditions, this paper uses the relevant data from "List of Overseas Investment Enterprises (Institutions)" issued by Ministry of Commerce and zero-inflated negative binomial regression model to carry out empirical tests from the perspective of factor environment competitiveness based on theoretical analysis. The results indicate that China's outward foreign direct investment(OFDI) in the countries along the Belt and Road(B&R) is more inclined to choose the locations with lower labor costs and smaller institutional distance from China as well as the countries or regions with better resource endowment, capital stock and technological level. Further discussion reveals that there are regional heterogeneity and country differences in the location choice of China's OFDI and it is found that both capital cost and innovation distance will affect China's OFDI significantly after adding other factors. Moreover, there is an "enhancing" effect existing between the cost advantage of tangible factors (such as labor capital) and institutional distance, and aweakening" effact existing between the cost advantage of tangible factors(such as labor capital) and innovation distance.
Keyword: the Belt and Road(B&R); outward foreign direct investment(OFDI); factor environment competitivenes
