Research On The Impact Of Institutional Distance On China's Direct Investment Location Choice In Countries Along The "Belt And Road"

China's direct investment in the countries along the “Belt and Road” is unevenly distributed,and there are obvious spatial agglomeration characteristics.Specifically,China 's direct investment along the “Belt and Road” is mainly concentrated in Southeast Asia and Central Asia,while Western Asia and Central and Eastern Europe have absorbed less direct investment from China.This paper attempts to explain this feature from the perspective of institutional distance.Therefore,first of all,this paper constructs a theoretical analysis framework and refines the evaluation system of decomposing political and economic institutions.Then,it expounds the influence mechanism of political institutional distance and economic institutional distance on the choice of international direct investment location.Finally,through the establishment of the spatial Dubin model,it empirically tests the impact of political institutional distance and economic institutional distance on China's direct investment location choices along the “Belt and Road” countries.The study found that China has significant spatial relevance to direct investment activities in countries along the Belt and Road.The direct effects and spatial spillover effects of political institutional distance and economic institutional distance are significantly negative.The spatial spillover effect brought by the political institutional distance accounts for more than 60% of the total effect,and the spatial spillover effect driven by the economic institutional distance accounts for more than 80% of the total effect.In addition,compared with low-income countries,the economic and political institutional distance of high-income countries has a greater impact on Chinese investment activities.According to the conclusion of the study,combined with the current goal of promoting the “One Belt,One Road” cooperation initiative in China – to create a community of destiny of political mutual trust,economic integration and cultural tolerance,this paper proposes policy recommendations:(1)Coordinate the tangible and intangible two hands,to play both government and market roles.When the government formulates direct investment policies for the “Belt and Road” countries,it needs to play as a guiding role,grasp the direction,adhere to the principle of taking the enterprise as the main body,market-oriented operation as the method,and mutual benefit and win-win as the goal,in order to let government investment leverage,leveraging and guiding market private sector investment,making commercial funds an investment subject,reconciling the tangible and invisible hands,letting government and market work together,jointly promote the high-quality development of the "Belt and Road".(2)Improve the political and economic environment,synergistically enhance the quality of institutions.The government should not only deepen institutional reforms,improve the domestic political institutions,develop market economy institutions,but also encourage countries along the “Belt and Road” to improve the quality of the institutional environment,in order to build a “Belt and Road” community of interests,and jointly create a good business investment environment.(3)Clarify two-phase goals for the short-term and long-term,select investment targets separately.Based on institutional distance and investment status,adopt a progressive investment path,to chieve short-term and long-term goals in stages.In short-term,investments are mainly focused on middle-and high-income countries along the Belt and Road,and gradually widen the scope of investment over the long term.Ultimately,it will realize interconnection with all countries along the “Belt and Road” and jointly build an inclusive,open,mutually beneficial and win-win community of human destiny.