Impact Of Institutional Quality On OFDI Location Choice Of The Host Country

Since reform and opening up, China’s economy has achieved an unprecedented rapid development over the past five years, China’s GDP reached 39.8 trillion yuan, representing an annual growth of 11.2%, economic total leap world second, according to China foreign directly investment statistics bulletin,2012 China became world third capital country,2014 China foreign directly investment flow up 123.12 billion dollars, accounted for global when investment flow of 9.1%; foreign directly investment stock 882.64 billion dollars, accounted for global when investment stock of 3.4%; flow continuous three years ranked by global national (area) ranking of 3rd bit, China has became real of investment powers.From a macroscopic statistical data, China’s foreign direct investment mainly to higher quality countries (areas), less institutional quality investment in poor countries or regions. Efficient quality system can reduce the transaction costs of investment, the system is a crucial factor affecting China’s foreign direct investment, maybe far more than the resources, population and capital is more important."One belt, one road" strategy proposed in 2013, researches about these countries are numerous, but there is little study the issue of our country investment to 65 countries on institutional perspective. This article is based on the context of system quality and linking foreign direct investment, institutional quality of our inquiry "One belt, one road" direct investment in the country has implications, how this should be done and reasonable location.This article sorts out the predecessors of systems quality and foreign direct investment theory and literature, and on the basis of existing research, Integrated three aspects:economic systems, political systems and the legal system to construction the institutional quality index and compare across the state of "One belt, one road".In theory, this article is discussed from the perspective of transaction cost quality relationship with foreign direct investment, and the economic system, political system, legal system respectively the impact on foreign direct investment. "One belt, one road" relatively concentrated investment distribution in 65 countries and has a certain internal laws, existing literature focused on the influence factors of economic development, this article attempts to analyze the impact of institutional quality on direct investment.Based on the above theory, we rebuild the institutional quality index, use 2005-2014 to "One belt, one road" national investment data from the empirical analysis of the impact of institutional quality on foreign direct investment. Empirical results show that institutional quality has a direct role in promoting foreign direct investment, the system of China’s foreign investment tended to higher quality countries (region), a country (or region) the better the quality of the system, their capacity to attract more investment in China. In addition we also analyzed the influence of other factors on foreign direct investment, such as geographical distance, the exchange rate index, real GDP per capital, resource endowments, infrastructure, language and other factors, the study found that these are also important factors affecting foreign direct investment.Finally, the theoretical and empirical analysis, in order to improve system quality and enhance the effective communication of information support to enhance the breadth of Chinese, strengthen infrastructure interconnection, modest advance the internationalization of RMB and other aspects of policy recommendations to optimize the choice of China’s foreign direct investment, also put forward some opinions and suggestions.