A Study On The Impact Of The Host Nations' Doing Business On Foreign Direct Investment

At present,the business environment is increasingly becoming an important factor that reflects the international competitiveness of a country or region.A business environment with internationalization,legalization,and marketization has an irreplaceable role in attracting foreign direct investment.On different occasions,the leaders of government emphasized the importance and necessities to optimize and improve the business environment in China.Therefore,it is urgent to optimize and improve the business environment in China and attract more foreign direct investment.With the deepening of business environment research,the limitations of the business environment index and rankings released by World Bank have become increasingly apparent,and more and more scholars have begun to propose how to rebuild the business environment assessment system.At the same time,previous research has not formed a specific conclusion on the relationship between the business environment and foreign direct investment.Based on this,this paper uses data from 85 economies for 9 years as sample data to study the relationship between the host nations' business environment and foreign direct investment and the impact.Started from the theoretical basis,this paper focuses on the two theories of Transaction Cost Theory and the Eclectic Theory of International Production.Through theoretical overview and model derivation,this paper analyzes the possible impact of the host nations' business environment on foreign direct investment,and then conducts research Empirical analysis.Considering the availability and reliability of the data,this paper selects panel data of 85 economies in the period of 2009-2017.These sample economies include developed countries,developing countries,and transition economies.At the same time,this paper selected 5 first-level indicators and 14 second-level indicators,comprehensively examine the political environment,economic environment,infrastructure construction,enterprise operating costs,and administrative supervision of the sample economies,and based on the principle of entropy method,the business environment index of 85 sample economies was calculated,and the measurement result was analyzed with foreign direct investment by using stata15.0 software.The research results show that the host nations' business environment has a significant positive impact on foreign direct investment,that is,the better the host nations' business environment,the more foreign direct investment it can attract.At the same time,the host country's technical level,openness to the outside world,and labor quality also have a positive impact on the inflow of foreign direct investment.The abundance of the host country's natural resources does not significantly affect the inflow of foreign direct investment.This paper also takes Singapore as an example to analyze the impact of Singapore's business environment on foreign direct investment.Based on the results of empirical analysis,this article proposes the following five suggestions: first,to further reduce the tax burden on foreign direct investment;second,to take advantage of human resources to train high-quality workers;third,to strengthen administrative supervision and continuously improve the supervision system;the fourth is to strengthen and improve infrastructure construction.The fifth is to tap economic growth points and continuously expand the market size.