How Business Environment Affects Chinese Enterprises' OFDI To Countries Along "The Belt And Road"

In 2013,the Belt and Road Initiative(Silk Road Economic Belt and the 21 st Century Maritime Silk Road Cooperation Initiative)was officially launched,which reflects China's commitment to building a new pattern of opening up to the outside world and lays out a grand blueprint for leading China's further integration into the world economy.In recent years,under the joint promotion of the “going out” strategy and the “Belt and Road” initiative,Chinese enterprises follow the trend of economic globalization and actively carry out outward foreign direct investment(OFDI)and international capacity cooperation.China's OFDI continued its strong momentum of bucking the trend under the impact of the global financial crisis in 2008,and surpassed attracting foreign direct investment to achieve net capital exports in 2015.Especially,Chinese enterprises show a steady upward trend in OFDI in countries along the Belt and Road,but at the same time we cannot be overlooked that most of them are developing countries or economies in transition.The host country's strict entry controls,inefficient commercial regulation and other institutional constraints will affect the OFDI of enterprises.Therefore,the influence of the host country institutional environment on OFDI of Chinese enterprises has always been the focus of scholars' research.Business environment,as a supplement to the macro-index of the institutional environment,microscopically measures the business regulations and their implementation faced by enterprises from start-up,operation to bankruptcy.Usually,a good business environment can help create a convenient and transparent market environment for the private economy while bad business environment increases institutional transaction costs and thus reduces business efficiency,thus the business environment is closely related to the business performance of enterprises.Based on analysis of theoretical mechanism of influence of the host country's business environment on China's enterprises' OFDI,this paper tries to reveal the impact mechanism of the state business environment along the Belt and Road on OFDI of Chinese enterprises through empirical analysis,which is of great theoretical significance for perfecting the theory of OFDI location selection in China,and of great practical significance for Chinese government to improve the relevant policy mechanism to fully protect the enterprise OFDI and for Chinese enterprises to make the right location choice combining the host country's business environment with its own investment motivation.This paper studies the impact of business environment by using the panel data of China's outward foreign direct investment OFDI to 49 countries along the Belt and Road from 2007 to 2017.The paper further study the different impact of business environment on China's OFDI from the perspective of the level of development of the host countries and enterprises' investment motivation.The results show that Chinese enterprises generally tend to invest in countries with worse business environment along the Belt and Road,but in the developed countries to invest,the host country's favorable business environment will have a positive role in attracting Chinese enterprises' OFDI;In terms of sub-indicators,the convenience of starting business and dealing with construction have a positive impact on China's OFDI while some indicators such as getting credit and protecting investors have a negative impact on China's OFDI;For the motivation to seek foreign market and strategic assets,there is a positive relationship between the business environment and China's OFDI,while for the motivation to seek natural resources,there is a negative relationship between them;different investment-motivated OFDI has heterogeneous preference for sub-indicators of the business environment.At last,based on the empirical results,the paper puts forward the policy proposal of promoting OFDI in the countries along the Belt and Road in China from the enterprise and government level.The government departments should strengthen policy coordination with the countries along the Belt and Road in terms of investment promotion and optimization of business environment,regularly release comprehensive assessment reports on the business environment of countries along the Belt and Road complemented by a list of investment recommendations and a negative list.The enterprises should combine their investment motives with the host country's business environment and choose the target host country reasonably,and pay more attention to the political and legal system of the host country.