The Empirical Study On The Efficiency And Influencing Factors Of China’s Direct Investment In Latin America

Latin America has been identified as a natural extension of the Maritime Silk Road in 21 st century,which became important part of "The Belt and Road".At the same time,China and Latin America have strong economic complementarity,and Latin America is the second largest investment destination of China.The research value of investment is self-evident.This paper analyses the investment environment in Latin America and concludes that the economic growth in Latin America is slowing down,the political environment is turbulent,and the infrastructure is relatively backward but rich in natural resources.China’s investment in Latin America also presents problems such as rapid growth but insufficient total amount,too concentrated investment regions and single investment mode.Therefore,it is necessary to study the efficiency and influencing factors of China’s direct investment in Latin America to avoid problems such as insufficient investment and excessive investment.Based on the analysis of the situation of China’s direct investment in Latin America,an empirical study is carried out.The panel data of China’s 27 Latin American countries in 2003-2018 are selected to build a stochastic frontier gravity model to measure the efficiency of China’s direct investment in Latin America and the non efficiency factors.The empirical results show that GDP,geographical distance,trade dependence,infrastructure,resource endowment and other macro variables effectively promote China’s direct investment in Latin America;Among the non efficiency factors of investment,trade freedom,monetary freedom,political stability,government efficiency and regulatory quality can effectively improve China’s investment efficiency in Latin America.Financial freedom,investment freedom,labor freedom,government spending,tax burden and political participation bring different degrees of resistance to investment.Further calculations show that: China’s overall investment efficiency in Latin America has increased year by year,but the efficiency value has always been in the lower range of 0.232-0.366;the regional differences in investment efficiency are obvious,and the investment efficiency of North American countries is significantly better than that of South America,the Caribbean and Central America;the average investment efficiency of Cuba,Guyana,Suriname and other countries in the country classification is greater than 0.5,but the average investmentefficiency of countries such as Dominica,Belize and Costa Rica is less than 0.2,and there is still much room for improvement in investment efficiency.Finally,in order to improve the investment efficiency of China and Latin America and promote the release of investment potential,relevant policy recommendations are proposed,such as optimizing investment location selection,focusing on selecting countries with high investment potential and high investment efficiency;signing bilateral investment protection agreements to protect corporate interests.Damaged;setting up an investment information platform and a risk assessment system for Latin America;under the guidance of the policies of both parties,strengthening investment in the part of infrastructure.