The Analysis of Institutional Factors and Chinese Outward Foreign Direct Investment Under the Belt and Road Initiative

Abstract

Based on the combined data of the World Bank’s World Governance Indicators, World Development Indicators, etc., and taking 132 countries around the world from 2003 to 2019 as samples, this paper analyzes the effect of the institutional factors on outward foreign direct investment of China along the “Belt and Road”. Based on the four inspection dimensions, the paper examines the impact of the four factors on the outward foreign direct investment of China in the full sample countries and countries along the “Belt and Road”. The results show that the quality of political institution, economic freedom and the bilateral investment agreements have a significant positive impact on it. And cultural distance has a significant negative impact on it. The role of the four institutional factors in the countries along the “Belt and Road” has been weakened or strengthened to varying degrees. There is obvious heterogeneity between different development levels and different regions.