Institutional Distance, Bilateral Relations And China's Outward Foreign Direct Investment

With the development of economic globalization,the political,economic and trade exchanges between China and other countries are deepening.China has gradually completed the transition from "bringing in" to "going out",and foreign direct investment is an important measure of China's "going out".A correct understanding of the influence of institutional distance and bilateral relations on China's foreign direct investment will help to promote China's foreign direct investment activities and speed up the pace of China's "going out".Based on the study of a large number of literature,this paper summarizes the various views of domestic and foreign scholars on this study,combines the relevant contents of institutional theory and international relations,and puts forward theoretical assumptions by sample.The effects of institutional distance and bilateral relationship on China's foreign direct investment(FDI)are studied,and the hypothesis that bilateral relationship can regulate the institutional distance is put forward.This paper uses Chinese direct investment data in 141 countries from 2007 to 2016 as dependent variables,based on the World Bank's World Governance Index(Worldwide Governance Indicators).The voting results of the UN General Assembly set up the system distance index and the bilateral relationship index,respectively,as two core explanatory variables.The fixed effect test and GMM test are used to analyze the influence of institutional distance and bilateral relationship on China's foreign direct investment(OFDI).The results show that,on the whole,whether it is a country with high institutional quality or a country with low institutional quality,there is a characteristic of "institutional proximity" in China's foreign direct investment(FDI),and for countries with high institutional quality,The influence of institutional distance on China's foreign direct investment(OFDI)is positive U-shaped,that is,there is a critical point,before which China's OFDI appears as "institutional connection"."close," when the system reaches the critical point,it shows "institutional evasion." close bilateral relations have a positive role in promoting and encouraging China's foreign direct investment.However,the effects of bilateral relations are different between countries with high institutional quality and those with low institutional quality,and good bilateral relations have a significant positive impact on investment in countries with low institutional quality.In addition,the empirical results confirmthat bilateral relations can mitigate the negative impact of institutional distance on China's FDI.The rapid development of China's foreign direct investment is the inevitable result of China's economic strength.From the current situation of economic cooperation between China and foreign countries,the development of China's export-oriented economy and the further implementation and deepening of "Belt and Road" will have a stronger driving effect on the rapid development of China's foreign direct investment.At a time when the global economy is relatively weak and international relations are tense,Chinese enterprises should pay attention to the combination of unilateral institutional factors and institutional distances when undertaking transnational investment,and gradually establish their own unique path of foreign direct investment.Assess the competitive advantages of home and host countries,rationally grasp the bilateral relations with host countries,and skillfully Take advantage of the regulatory role of bilateral relations.This study has a guiding role in how to promote China's foreign direct investment and is conducive to the better implementation of the "going out" strategy and the "Belt and Road" initiative in China.