A Study Of The Host Country's Urbanization Level Affecting Location Choice Of Chinese OFDI

With the advancement of globalization and the rapid development of multinational corporations in the world,foreign direct investment has become an increasingly important contribution to world economic growth.The OFDI in China has only developed for about 40 years.Although it started late,its development has been extremely rapid.And the proportion of FDI increases gradually in the global.Therefore,it is helpful to study the location choice of Chinese OFDI and to promote the reasonable layout of Chinese OFDI.Urbanization is one of the most important issues in the development of all countries in the world.The development level of urbanization in all countries in the world is different and the gap is relatively large.The impact on OFDI in China is not the same,either.Therefore,this paper studies the location of OFDI in our country that based on the perspective of urbanization in the host country.Firstly,this paper sorts out related literature research,then introduces Chinese OFDI scale,and presents the status quo of OFDI location selection in China from three angles of industry OFDI,host country's type and urbanization level.Secondly,it analyzes the impact mechanism that the development of urbanization in countries affects Chinese OFDI from two perspectives.One is based on employment and consumption,industrial agglomeration effect and energy infrastructure demand brought by the urbanization in developing countries.Another is based on the technology reverse spillover effect and the construction needs of aging infrastructure brought by the urbanization in developed countries.Thirdly,by selecting the 146 countries and regions in the world as the research object and selecting cross-border panel data from 2003 to 2016,this paper constructs an extended investment gravity model to empirically study the impact of the urbanization in host country on Chinese OFDI,and draws the following conclusions: the higher the urbanization rate in the host country,the more obvious our country tends to choose its location for direct investment;in addition,it also verifies that Chinese OFDI's choice of location has strong market seeking motivation,meanwhile Chinese OFDI activities are driven by domestic economic development.Meantime,it was found that Chinese OFDI is negatively related to the quality of the host country's system.Based on the further analysis of HDI,the paper divides the sample countries into developing countries and developed countries to conduct empirical studies respectively,and still come to the conclusion that the urbanization rates of these two types of countries are positively correlated with OFDI in China.In addition,the paper also finds that compared with developing countries,the level of urbanization in developed countries is more attractive to Chinese OFDI.Finally,based on the above analysis of the status quo,the mechanism and the empirical test,this paper gives suggestions on the choice of investment location in developing countries and developed countries respectively.The location choice of Chinese OFDI should be biased toward countries and regions with higher urbanization rates.After dividing the types of countries,it was suggested that investment in developing countries should be further consolidated and expanded,and investment in developed countries should continue to be strengthened.