Research On The Impact Of Multi-dimensional Institutional Distance On China's Direct Investment In Countries Along The "Belt And Road"

With the implementation of “The Belt and Road” major initiative,China's total direct investment in countries along “The Belt and Road” has been increasing year by year,bringing new opportunities for development to both China and countries along the route.However,the in-depth advancement of “The Belt and Road” major initiative also faces a series of challenges.“The Belt and Road” covers 64 continents in Asia,Europe and Africa.These countries or regions have different systems,development history,social culture,religious beliefs and ethnic issues.It can be seen that institutional distance has become an important factor that cannot be ignored in the implementation of “The Belt and Road”.In view of the above background,this paper organizes the data of direct investment of 43 countries along “The Belt and Road”from 2005 to 2017,constructs a corresponding spatial panel model,and adopts an empirical research method to judge the system distance to China along “The Belt and Road” countries.The impact of direct investment and testing of third country effects,and then analysis of China's main factors affecting direct investment in countries along the route.Combining with the research needs,this paper firstly summarizes the relevant theories and literatures,and sorts out the status quo of China's direct investment and institutional distance in the countries along the line.Then,using the Moran index to test the auto-correlation of China's OFDI space,and then establish a spatial lag model(SAR).And the spatial error model(SEM),from the political,economic,and cultural aspects of the impact of the institutional distance between countries along the line on China's OFDI,and China's third country effect on the "institutional space" of OFDI along the line of countries In the end,the countries along the line will be grouped according to the quality of the system to analyze whether China has the characteristics of “institutional proximity” and “institutional bias” for its OFDI.This paper analyzes and finds that(1)China's direct investment in countriesalong “The Belt and Road” has a significant third country effect in the “institutional space”,which is manifested as a complementary effect.(2)The institutional distance between the countries along “The Belt and Road” and China has an important impact on China's OFDI.(3)China has the characteristics of political “institutional proximity” and economic “institutional bias” when investing in countries with high quality along “The Belt and Road” system.(4)Traditional factors such as natural resource endowment,infrastructure level,labor cost and service industry development level along “The Belt and Road” have significant impacts on China's foreign direct investment.