TITLE:
Influences of Institutional Differences on Chinese Enterprises’ Investment on Countries in “The Belt and Road” Strategy—Based on Regulatory Effects of Ethnic Chinese in Host Countries
AUTHORS:
Yue Gao
KEYWORDS:
The Belt and Road, OFDI, Institution Difference
JOURNAL NAME:
Modern Economy,
Vol.8 No.4,
April
18,
2017
ABSTRACT: While implementing the strategy of “the Belt
and Road” in China, different countries along the belt demonstrate huge
differences from China. Such differences are an important reason that hinders
foreign investments of Chinese enterprises. Based on the perspective of
differences between host nations’ systems and Chinese system, the paper
discusses the theoretic mechanism of labor exports and foreign direct
investments from Chinese enterprises. According the institutional differences
between 65 countries along “The Belt and Road” and China, active degree of
overseas Chinese and the number of corporate investment projects, the paper
adopts zero-inflated negative binomial regression method and empirical
research, and finds out: 1) Institutional differences are negatively related to
OFDI of Chinese enterprises. In terms of investment on “the Belt and Road”
nations, Chinese enterprises are also more inclined to make investments in
nations with governance levels more similar to China. 2) The activity of ethnic
Chinese in host countries made up the negative impact of the cultural differences
on OFDI location selection of Chinese enterprise. 3) Regardless of
institutional differences and the host country Chinese network, as for OFDI
enterprises motivated by technology research and development, they do not pose
significant impacts. The paper contains important enlightenment on how to make
the best use of system and labor services export during the process of
implementing “the Belt and Road”.