A Study On The Impact Of Institutional Quality Of CEE Countries On The Efficiency Of Chinese OFDI

With the continuous promotion of China-CEE cooperation mechanism and "One Belt,One Road" initiative,economic and trade cooperation between China and CEE countries has been strengthened,among which China’s direct investment in CEE countries has developed particularly rapidly in recent years and has become an important support for the further development of bilateral relations.Although the resources,location and policy advantages of CEE have created huge investment opportunities for foreign investors,the complexity of the region’s legal institution,lack of transparency in the market and political instability have increased the risks of investing in the region,resulting in inefficient investment and serious investment losses for investors,one of the important reasons being the influence of institutional factors in CEE countries.Therefore,an in-depth study on the relationship between institutional quality and Chinese OFDI efficiency in CEE countries can provide a basis for the Chinese government to formulate investment policies in CEE,provide information guidance for Chinese enterprises to invest abroad,effectively avoid institutional risks in host countries,and enable Chinese outbound investment funds to flow to countries with better investment environments.Since institution is a complex multidimensional structure,the impact of institutional quality in different dimensions may be different from its overall effect.Therefore,this thesis considers three aspects of political institution,economic institution and legal institution,and uses the stochastic frontier Gravity model to analyze the impact of institutional quality in different dimensions of Central and Eastern European countries on China’s OFDI efficiency The impact of political stability and government integrity on the efficiency of China’s OFDI is not significant.Corruption control hinders it,while regulatory quality promotes it;In the quality of economic institution,financial freedom is not an important factor affecting the efficiency of China’s OFDI.Commercial freedom and trade freedom have a restraining effect on it,while labor freedom and investment freedom have a positive impact on it;In the quality of the legal institution,the degree of property rights protection is positively correlated with the efficiency of China’s OFDI,while the degree of legal perfection has a restraining effect on it.On this basis,this article conducted a heterogeneity analysis,and the results showed that from the heterogeneity analysis of organizational member states,the political institution quality coefficients of EU member states were not significant,indicating that the political institution quality of EU member states did not have a significant impact on the efficiency of China’s OFDI,and the quality of economic and legal institutions hindered the efficiency of China’s OFDI;The political institution quality of non EU member states has a promoting effect on the efficiency of China’s OFDI,while the quality of legal and economic institutions has a negative impact on it.From the analysis of geographical heterogeneity,the quality of political and legal institutions in the three Baltic countries has no significant impact on the efficiency of China’s OFDI,while the quality of economic institutions has a positive impact on it;The quality of political institutions in the four Central European countries has a promoting effect on the efficiency of China’s OFDI,while the quality of economic and legal institutions hinders it;The quality of legal institutions in the ten countries of Southeast Europe does not have a significant impact on the efficiency of China’s OFDI,while the quality of political and economic institutions has a positive impact on it.Finally,the thesis offers relevant suggestions: the government should guide enterprises to establish an early warning mechanism for overseas investment risks,improve the legal aid mechanism and service system for overseas investment,strengthen the construction of cooperation platforms between China and CEE countries,and actively conclude bilateral investment agreements with CEE countries;at the same time enterprises should also focus on differentiated investment and make different investment strategies according to the different institutional situations of each country.