Term Limits Of Host Country Leaders And China’s OFDI In The Belt And Road Initiative Area

With the increase of China’s foreign direct investment,its regional distribution has attracted much attention.Due to the difference of the overseas market characteristics,language environment,way of thinking and domestic laws,Chinese enterprises face many risks and severe challenges in overseas investment.Therefore,how to efficiently promote the overseas investment and cooperation of Chinese enterprises has become an important research topic under the new situation.Since China’s application of go-out strategy,the rapid development of China’s OFDI has caused a lot of related research and many important research results.However,national leaders,who act a crucial role in affecting the host country’s economic development and foreign policy,have not yet attracted enough attention for its potential impact on China’s OFDI.Political future will affect its economic growth.At present,scholars are increasingly emphasizing the significant role of government behavior and its governance in economic and social development.Accordingly,the "leadership effect" of government behavior and economic and social development has been increasingly revealed by people.Therefore,based on the panel data of China’s OFDI location during 2003-2014,this paper examines the influence of term limits of host country leaders on China’s OFDI in the Belt and Road Initiative area.Overall,we find robust evidence that it exhibits a significant inverted U relationship between them.But further study shows that the influence of term limits of host country leaders on China’s OFDI varies sharply with different political systems and host country leaders’ attitude toward China.The results suggest that the inverted U relationship only exists in autocratic systems.However,under democratic systems,it presents significant positive linear relationship.And same result is found for pro-China leaders.For anti-China leaders,it shows a negative linear relationship.Therefore,Chinese enterprises must attach great importance to the change of term limits of host country leaders when developing foreign investment;besides,they should also adopt a set of strategy and policy based on the political system of host countries and leaders’ attitude toward China.