A Research On The Influence Of Host Countries’ Economic Policy Uncertainty On China’s OFDI

In this paper,the concept of policy uncertainty will be introduced,the main factors affecting OFDI will be summarized,and the mechanism of policy uncertainty on OFDI will be theoretically discussed and hypotheses will be made,so as to build a theoretical model.At the same time,when China’s economic development is faced with greater uncertainty,the real option effect,financing constraint effect,fund reserve effect and so on will have a certain impact on China’s overseas direct investment.On this basis,the influence path of policy uncertainty difference between the two countries,policy uncertainty under different investment preferences and national policy uncertainty at different development stages on China’s OFDI is discussed.Finally,this paper adopts the two-step systematic generalized moment estimation method to conduct regression analysis on the balance panel data of 22 countries from 2003 to 2019,and draws the following conclusions:Firstly,the uncertainty of China’s economic policy has a positive stimulating effect on China’s OFDI level,that is,the increase of economic policy uncertainty in the home country can promote the stimulation of China’s OFDI,while the uncertainty of the host country’s economic policy has a negative effect.This means that with the increase of economic policy uncertainty in China,Chinese investors will tend to conduct OFDI in host countries with less economic policy uncertainty.Second,in terms of bilateral economic policy uncertainty difference,the higher the uncertainty of China’s economic policy is compared with that of the host country,the more it can increase China’s OFDI.When the economic policy uncertainty of China is higher than that of the host country,the influence of the host country’s economic policy uncertainty(HEPU)on China’s OFDI is significantly negative.For the sample group whose economic policy uncertainty of China is less than or equal to that of host country,host country economic policy uncertainty(HEPU)has no significant effect on China’s OFDI.Thirdly,for the three types of FDI with different investment trends,the increase of the economic policy uncertainty of the host country will have a negative impact on the two types of investment trends at the same time,and inhibit the market trend and technology trend FDI,which have greater risk aversion due to the uncertainty of economic policy.However,the change of the economic policy uncertainty of the host country has no great impact on the development of an OFDI with resource endowment.The increase in the uncertainty of the economic policy of the home country can encourage the investment of three trends,that is,when the uncertainty of the economic policy of an investor country increases,the OFDI of market tendency,technological tendency and resource endowment will all increaseFourthly,in terms of economic policy uncertainty at the national level,China’s OFDI is greatly affected by the uncertainties of different countries: China’s OFDI in developed countries is more sensitive to the risks caused by economic policy uncertainty,while China’s OFDI in developing countries and emerging countries is relatively insensitive to the risks caused by economic policy uncertainty.On this basis,this paper provides corresponding policy suggestions for the development of China’s OFDI from the two levels of enterprise and government.As far as enterprises are concerned,they should pay attention to collecting information related to investment and reduce the blind degree of investment.Second,we should strengthen the risk control of banks and perfect the risk control system of banks.Cultivate their core competitiveness,enhance the ability to resist risks.From the perspective of the government,it is necessary to enhance the stability and transparency of policies,strengthen the guidance and service for overseas investment,expand the financing channels and ways of enterprises,and constantly consolidate and deepen the cooperation in international trade.