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Political Risk And China's Foreign Direct Investment

Posted on:2020-05-26Degree:MasterType:Thesis
Country:ChinaCandidate:Y F ShiFull Text:PDF
GTID:2416330578983925Subject:International Trade
Abstract/Summary:PDF Full Text Request
In 2013,General Secretary Xi Jinping proposed the Belt and Road initiative for the first time,and was highly evaluated and responded to by relevant countries and regions along the route.The "going out" cause of Chinese enterprises has entered a new stage of development.At the end of 2015,the amount of China's outward foreign investment exceeded the amount of actual use of foreign capital for the first time,and a new era of capital output was kicked off.With the proposal and promotion of the Belt and Road Initiative,China's foreign investment has been moving towards a high-quality development.At the same time,the world economy in the post-financial crisis era still faces many uncertainties.Trade protectionism is showing signs of rising again,and the international geopolitical pattern also shows complex and subtle fluctuations.In a number of different geographical areas,political risk factors such as frequent changes in political power,increased corruption,and intensified religious ethnic conflicts have emerged,which has had a real impact on China's foreign investment in the critical period of development.Based on this background,the research in this paper deeply explores the mechanism of political risk affecting China's foreign direct investment.Through the theoretical model analysis framework and the extensive data collection,the paper analyzes the specific impact of political risk factors.The author uses the method of principal component analysis to reasonably measure the total political risk indicators and three sub-indicators of the countries in the sample,namely,the government administration,market conditions and social forces,which correspond to the political,economic and social conditions of political risks.Concluded as follow:(1)The total political risk index has a significant impact on China's OFDI,that is,the lower the risk of the host country,the more favorable the investment behavior of Chinese enterprises;(2)The three sub-indicators under the total sample perspective also have a significant positive impact on China's OFDI.It shows that the political,conditional and social conditions that constitute political risks will affect the direct investment of Chinese enterprises;(3)Based on the sub-sample perspective of the three countries' echelon shows a certain heterogeneity situation,the general risk index of the "medium group" countries has reversed the direction of China's OFDI,and its market conditions and social power sub-indicators have also turned into negativeeffects.The author explores the possible reasons from the characteristics of this group of countries and the investment motives of Chinese enterprises;(4)The adjustment effect analysis using the method of interactive terms reveals that the regulatory role of political relations exists remarkably.On the one hand,good political relations can directly promote China's investment in the host country,and on the other hand,it has a regulatory effect on the impact of political risk on China's OFDI.To a certain extent,this reveals that good political relations are a major reason why Chinese companies prefer to invest in some countries with high political risk in some cases.Finally,based on the main results of this research,the author builds a framework of action revelation from "recognition" to "prevention",covering macro-government perspective and micro-enterprise main body,in order to optimize the government's guidance and enterprises participate in the actual actions,and resist the impact caused by the political risk factors of the host country.
Keywords/Search Tags:Foreign Direct Investment, Political Risk, "Belt And Road" Initiative, Host Country
PDF Full Text Request
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