The Research On China's OFDI To OBOR:Institutional Distance And Institutinal Coordination

Since "The Belt and Road(OBOR)" initiative was put forward in 2013,Chinese government have promoted the construction of OBOR and have accelerated foreign investment facilitation actively.In recent years,Chinese outward foreign direct investment mainly flows to the belt and road countries,but there are not good political and economic systems and effective investment policies in most of OBOR countries.Because of institution instability in OBOR countries,Chinese multinational enterprises' investment in OBOR countries faces greater institutional risks,compared with domestic investments and can't gain enough protectionIn the complex international investment environment,the institutional difference will have a negative effect on China's OFDI process to OBOR.It is necessary to find the best coordination tools to protect and promote China's OFDI.Bilateral investment agreements(BITs)aim at protecting and promoting bilateral foreign direct investments and are the most widely used international investment agreements.China has signed BITs with most countries of “OBOR”,whic became the main policy tool to make up the regional institutional environment shortness.The construction of the overseas economic and trade cooperation zone(COCZ),based on equal participation and common benefit of all countries,realizes the integration and sharing of resources between China and the OBOR countries.It is not only an important measure to help our country transfer rich productivity,avoid trade barriers and ensure the supply of resources.It is also an important platform for OBOR countries to promote the industrial upgrading and improve jobs.Therefore,based on the existing studies,this paper discusses how the institutional distances in the dimension of politics and economy affect the OFDI and focuses on the coordinating tools including BITs and COCZ which close the bilateral institutional distance of politics and economy.Secondly,this paper analyzes the status of China's OFDI to OBOR countries and bilateral institutional distance,and then analyzes the development process of institutinal coordinating tools along the belt and the road.Thirdly,the paper uses the system GMM method and does empirical research.Finally,the results are: The bilateral institutional distances of politics and economy have hindered China's OFDI growth to OBOR countries.BITs can't significantly enhance China's OFDI and can't shorten the political institution distance,but effectively close the economic institution distance,while the construction of overseas economic and trade cooperation zone has a significantly positive effect on shortening political and economic institutional distance and enhancing China's OFDI.