The Export Trade Effect Of China’s Direct Investment In The Belt And Road Countries

In the context of globalization,integration into the world economy can bring more development to the country.As two important ways for a country to integrate into the global economy,outward foreign direct investment(OFDI)and international trade have been widely concerned.The Belt and Road Initiative promotes regional economic cooperation while promoting the recovery and development of the world economy,and provides Chinese ideas and solutions for improving the global governance system.Since the initiative was proposed,the scale of China’s investment and trade with countries along the Belt and Road has increased year by year,so it is necessary to study the relationship between China’s OFDI and bilateral trade with countries along the Belt and Road.The factor endowments are complementary between countries covered by the Belt and Road Initiative and China.How this feature affects the relationship between OFDI and international trade is also worth exploring.This paper explores the impact of OFDI on bilateral trade and the moderating effect of factor endowment differences from both theoretical and empirical aspects.In terms of theory,this paper first divides OFDI into four categories according to motivation,discusses the mechanism of various types of OFDI on trade import and export,and the moderating mechanism of the difference in factor endowments.Secondly,this paper descriptively analyzes the current situation of China’s OFDI and bilateral trade with countries along the Belt and Road and summarizes their respective characteristics.In terms of empirical evidence,based on the panel data of China and48 countries along the Belt and Road from 2007 to 2021,this paper examines the trade effect of OFDI,and adds three moderating variables including per capita capital difference,natural resource difference and technology difference to test the impact of factor endowment difference on OFDI trade effect.The four investment motivation variables of the host country’s capital endowment,labor endowment,natural resource endowment and technological endowment were further used to test China’s investment motivation in the Belt and Road countries.The sample countries were classified according to the investment motivation,and the OFDI trade effect test and the factor endowment difference moderating effect test were carried out respectively.The conclusions are as follows:(1)China’s OFDI in countries along the Belt and Road has a significant effect on trade exports,and has no significant impact on trade imports.The difference in per capita capital inhibits the export effect of OFDI,mainly by suppressing the export effect of market-seeking OFDI.The difference in natural resources has a positive impact on the export effect of OFDI,but the results are not robust.(2)China’s OFDI in countries along the Belt and Road includes three motivations: market seeking motivation,efficiency seeking motivation,and natural resource seeking motivation.(3)OFDI of the three types of motivations has a significant export promotion effect,but the impact on trade imports is not significant.The difference in per capita capital weakens the export effect of market seeking OFDI,and has no significant regulating effect on the trade effect of efficiency seeking OFDI.Natural resource differences do not significantly moderate the export effect of resource seeking OFDI.Finally,based on the conclusions above,this paper provides policy recommendations for China’s investment in countries along the Belt and Road.