Research On Levying Risk,Risk Preference And China's OFDI Location Selection

In recent years,the size and speed of China's OFDI has been expanding,and with the Belt and Road Initiative,China's pace of going out will be further increased.However,the attendant political risks have intensified,and in 2016 Zimbabwe,by enacting a decree,limited the proportion of corporate equity to gain control of foreignfunded enterprises;in 2017,India and Nepal tore up contracts for investment in hydropower stations with Chinese enterprises without authorization;2018 U.S.restrictions on export chips to ZTE and United Canada's unauthorized detention of Huawei executives and other political events.It not only threatens the security of property and investment of Chinese enterprises,but even seriously violates and endangers the basic rights and freedoms of Chinese citizens.But the comprehensive study of the political risk research of China's overseas direct investment needs to be improved in terms of depth and breadth.Therefore,the research on the political risk of China's overseas direct investment is particularly important.From the research content,the paper first studies the obstruction effect of each subdivision of political risk on OFDI and its mutual influence mechanism by drawing on the general equilibrium model of levying risk constructed by relevant scholars.Then through the study of the world's political risk appetite for overseas direct investment,and then through the study of China's full sample of overseas direct investment political risk appetite and the world and the previous theoretical model to form a contrast.Secondly,according to the different economic development degree of the host country,this paper further analyzes the political risk preference of China for the OFDI of developed countries,emerging market countries,other developing countries and countries along the Belt and road,and further adds the investment motivation variable in order to better explain its reasons for different samples.In the research method,this paper collects dynamic panel data from 134 countries based on the ICRG database and related databases such as the World Bank,and the political risk and overseas investment data from 2003 to 2016.Then,using the regression method of system GMM,the political risk preference of OFDI in the world is studied,and the political risk preference of OFDI in China is compared and analyzed,and then the sample research is carried out according to the different stages of economic development of the host country.Finally,this paper uses the mixed regression model and the replacement independent variable to test the robustness of the regression results.The results show that there is no political risk preference in the world as a whole,and there is a tendency to impose lower risk and lower risk of conflict,and other political risks are not significant.But there is a clear risk appetite in China's OFDI.Through the conclusion of further sub-sample research,it is concluded that China has no tendency of political risk preference to developed countries,and strong market seeking motivation.China has shown a strong risk appetite for emerging market countries,other developing countries and countries along the Belt and Road,as well as stronger resource-seeking motives.