The Research On Financial Development And Infrastructure’s Influence On China’s OFDI In Countries Along The Belt And Road

The Belt and Road Initiative focuses on the infrastructure construction and related financial support. It has aroused great interests whether and how financial development and infrastructure investment in home and host countries influence China’s OFDI in countries along the Belt and Road. This paper constructs an influence transmission mechanism of financial development and infrastructure on China’s OFDI in the theoretical analysis. Based on the panel data of 60 countries along the Belt and Road and 34 OECD member countries from 2003 to 2011, this paper examines financial development and infrastructure’s influence on China’s OFDI and whether they have threshold effect and discusses the role of AIIB indirectly according to an extended gravity model, which adopts the econometric methods of BOOTSTRAP, GMM and LIML etc. The empirical results show that in countries along the Belt and Road and OECD member countries, differences exist in China’s OFDI and on which the effect of financial development and infrastructure in home and host countries. China’s financial development and infrastructure influence China’s OFDI most obviously, while the impact of financial development and infrastructure in host countries have threshold effect on China’s OFDI.