A Study On The Influence Of Host Country's Institutional Distance On China's OFDI

After years of development,China's foreign direct investment has achieved remarkable results.From the initial focus on attracting foreign investment as an economic strategy,to today's continuous improvement in China's position in the international investment market,China has become one of the world's most important investment countries.In 2013,the cooperation proposal of the "New Silk Road Economic Belt" and the "21st Century Maritime Silk Road" means that my country will carry out more indepth trade and investment activities with the countries along the "Belt and Road".Because countries have different national conditions,and there are certain differences in the systems of various countries,the size of the institutional distance between countries will inevitably affect a country's foreign direct investment.How the size of the institutional distance will affect my country's foreign direct investment has also become a critical issue.The content of the thesis includes five parts.The first part is an introduction,which introduces the research background,research significance,domestic and foreign research status,research content,research methods and innovations and shortcomings of this article;the second part is the theoretical analysis of the impact of institutional distance on OFDI;the third part is China's investment status and institutional distance status of countries along the "21st Century Maritime Silk Road".The principal component analysis method is used to determine the comprehensive institutional distance index and measure the institutional distance between China and the host country;the fourth part is an empirical analysis.The investment data of China and 26 countries along the "21st Century Maritime Silk Road" from 2008 to 2017 were selected,and the panel regression model was used to analyze the impact of the institutional distance between the host country and China on China's foreign direct investment through generalized least squares.Fifth Part of the conclusion and recommendations.The results of the study show that: the institutional distance between China and the host country is positively correlated with China's foreign direct investment,and the political institutional distance,economic institutional distance,and cultural institutional distance are all positively correlated with China's foreign direct investment.The country invests;China should improve the current institutional environment in China,provide a good production and operating environment for enterprises,reduce the transaction costs and production costs of enterprises,and improve the competitiveness of enterprises.It is necessary to provide various support to foreign-invested enterprises in China.