2023 VOLUME 3 ISSUE 4
RESEARCH ARTICLE
Impact of host country's business environment on China's OFDI in Belt and Road countries: Based on the perspective of investment motives
AUTHOR
Hui Zeng, Hongyu Xia, Qiang Zhao
ABSTRACT
This study used a two-step system generalized method of moments to examine the impact of the business environment in the Belt and Road countries on outward foreign direct investment (OFDI) of China while presenting a deeper investigation into the spatial characteristics of OFDI through a spatial error model. The results revealed that the impact mentioned above varies with different investment motivations. If Chinese businesses are motivated by local consumer markets or seeking a human workforce to make an outward direct investment, they will choose countries with poor business environments. They will select countries with stable business environments for their natural resources or strategic assets. Significant spatial agglomeration exists in China's OFDI in the countries and regions along the routes, while substantial evidence is absent on the business environment investment effect with different motivations. Finally, relevant recommendations concluded according to the study.
KEYWORDS
Business environment; Outward foreign direct investment; Investment motives; Spatial characteristics; Two-step system generalized method of moments