Research On The Impact Of Political Risks Of Countries Along The "One Belt One Road" On China’s OFDI

In 2013,after General Secretary Xi Jinping proposed the "Belt and Road" cooperation initiative,the scale of investment by Chinese companies in countries along the route has continued to increase.This not only satisfies the strong desire of China and the countries along the route for social and economic development,but also provides a higher-level and deeper regional cooperation platform for China to participate in international competition and cooperation.However,most of the countries along the route have political risks in the form of terrorism and wars,political instability,imperfect legal systems,external conflicts,and corruption,which have brought huge challenges to the construction of the “Belt and Road”.In theory,the greater the political risk,the greater the uncertainty of the investment and operation of multinational companies,and the greater the negative impact it may have on OFDI.However,the empirical conclusions of different scholars are different.Based on this,this article examines the specific impact of political risks in countries along the route on OFDI in China in the context of the “One Belt,One Road” initiative.First of all,this article conducts a detailed analysis of the investment situation of Chinese enterprises in the countries along the route.The result found that my country’s total investment volume is rising continuously,and the investment flow has the characteristics of uneven regional distribution and concentrated industry distribution.Then this article expounds the five manifestations of political risk and analyzes its mechanism of OFDI,which serves as the theoretical support for the construction of this article’s model.In the empirical analysis part,this article first uses the global principal component analysis method to weight the five political risk indicators into comprehensive political risk PR,and then uses the panel of China’s direct investment in 37 countries along the route from 2009 to 2017 under the framework of the investment gravity model.Data,study the relationship between political risk and OFDI,and prove the viewpoint of this article through heterogeneity test and robustness test.The results show that(1)political risk is negatively correlated with China’s OFDI along the “Belt and Road”.(2)The motivation to acquire natural resources and labor resources has impacted the impact of political risks on China’s OFDI.(3)Friendly political relations weaken the influence of political risks on OFDI in China to a certain extent.Finally,this article combines the research results and the status quo of China’s investment in countries along the route,and puts forward policy recommendations with a view to contributing to the high-quality development of the "Belt and Road" initiative.